Tip pooling is the process of combining tips that were earned and then distributing them among the workers. For instance, a local brewery may have five members of the wait staff at work one evening. Instead of directly keeping the tips that are given to them, they put those tips into a general pool and then split them into even fifths.
This process is legal in Indiana. It can sometimes be controversial. Employees may feel that they are entitled to the tips that they earned directly, and they may be resentful of having to share those tips with other workers, especially if those workers brought in a lower amount of tips themselves. From a legal perspective, though, if an employer wants to use a mandatory tip pool, they can do so.
Who can be included?
One of the most common reasons for conflict over tip pools is that ineligible individuals may be included in the pool. As a general rule, managers, supervisors and employers cannot take money out of the pool.
For example, the hypothetical brewery owner noted above cannot include themselves in the tip pool and then split those tips six ways, keeping a portion for themselves. They have not directly earned those tips and are not entitled to them, even though they own the business. Only the actual employees at the business, who earned the tips from customers, should be included.
As an employee, you may believe that the tip pool has been set up unfairly or that your tips are being taken by your employer without the legal authority to do so. If you find yourself in this position, it could be a serious violation of wage and hour laws, and you need to know what steps to take.
