What are the rules for tip-pooling?

Tip-pooling is a practice used in the restaurant industry, where employees combine their tips in a collective pool and divide them among employees. In Colorado, the rules for tip-pooling are outlined by the Colorado Wage Act and Division of Labor Regulations. All tip-pooling must be voluntary and employees must be informed that they can decline to participate. Employers cannot require any employee to participate in the tip-pool and cannot take any of the tips from the pool. Tip-pooling pools must be distributed evenly among all participating employees. The pool must only include tips that are distributed directly to employees, and it must exclude any service charges paid by customers. Employees who do not receive tips directly, such as dishwashers, are ineligible to receive tips from the pool. Managers, owners, or supervisors cannot participate in the pool, and employers cannot use tips to supplement employee wages. Employers have the responsibility to keep accurate records of the tip-pooling, the employees that participated, and the amounts each employee received. These records must be kept for at least three years. If an employer is found in violation of the tip-pooling laws, they may face criminal liability and/or civil penalties.

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What are the rules for tip-pooling?

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