What are the rules for tip-pooling?

Tip-pooling is the act of pooling tips earned by employees and then sharing the money amongst the employees. In Virginia, the rules for tip-pooling vary depending on the type of employer. For employers subject to the federal Fair Labor Standards Act (FLSA), there is no law that prohibits tip-pooling, as long as the employees who are sharing the tips are all regularly or customarily tipped employees, such as wait staff, bussers, or bartenders. For employers not covered by the FLSA, however, there are specific requirements that must be followed for a valid tip-pooling arrangement. These include: employees must voluntarily choose to participate in the pool; the pool must be allocated among employees who regularly and customarily receive tips; all tips collected must be distributed among participating employees; and the employer may not receive any portion of the tip pool. In Virginia, employers that participate in rip-pooling must also comply with any relevant state labor laws. These laws may include minimum wage requirements, overtime requirements, and regulations regarding tip credits. It is important to remember that employers have the right to require participation in tip-pooling but cannot mandate “tipping out” employees who do not receive tips from customers. Employees also have the right to challenge a tip-pooling arrangement if they feel it is unfair or if it violates the law.

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What are the rules for tip-pooling?

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