What are the rules for tip-pooling?

Tip-pooling is a system used by restaurants and other businesses in Mississippi to allow employees to share their tips. The rules for tip-pooling in Mississippi are laid out in the Mississippi Wage and Hour Law. Tip pooling is a voluntary arrangement between employers and employees in which employees contribute a portion of their gratuities to a shared pool. The pool of tips is then divided among the employees based on the agreement. The Mississippi Wage and Hour Law requires that any tip pooling arrangement be voluntary between employers and employees, and that the employees receive no less than the federal minimum wage for each hour worked. The employer may not take a portion of the tips as a fee or for administrative costs, nor may the employer retain any portion of the employees’ tips. Employees should receive clear notification of the tip-pooling agreement before participating, and the agreement should not conflict with federal or state laws. Employers may not require employees to contribute tips to the pool or to share their tips with other employees. All tips resulting from the tip-pooling arrangement must be reported and taxes paid on the tips. The Mississippi Wage and Hour Law also restricts the eligibility of employees who can participate in tip-pooling arrangements. Generally, any employee who regularly provides applicable services to a customer is eligible to participate. Employees who do not provide direct services to customers, such as managers, may not participate in tip-pools.

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What are the rules for tip-pooling?

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