Can managers take tips?

Under federal law (the Fair Labor Standards Act), managers and supervisors may not keep any portion of employees' tips, including through a tip pool, regardless of whether the employer takes a tip credit. A manager may generally keep only tips they receive directly for service they themselves provided.

Owners are treated the same way for tip-pool purposes. Since 2018, federal law has also barred employers from keeping tips for any purpose, with civil penalties possible when they do.

Where it gets murky

• “Shift leads” and “keyholders” sit in a gray zone: the test is about duties (hiring, firing, directing work), not the job title.
• Tip pools that include kitchen and other back-of-house staff are allowed under federal law when the employer pays full minimum wage and takes no tip credit, but managers still can't be in the pool.
• States can be stricter than federal law, and several are.

This page describes U.S. federal law; rules differ by state, by province (several Canadian provinces ban employer tip-keeping outright), and by situation. It isn't legal advice: contact your local labor authority (in the U.S., the Department of Labor, 1-866-487-9243) or an attorney.