--- title: DOL Regulations on Tip Sharing description: FocusPay Solutions provides business clients with the regulations on tip sharing. image: https://info.machen.cpa/hubfs/tips%20-1163497270-1.jpeg --- [Family of Services](http://machenmcchesney.com/about-us/family-of-companies/)  |  [CPA & Business Advisory](http://machenmcchesney.com)  |  [Payroll, HR & Benefits](http://focuspaysolutions.com/)  |  [Wealth Management](http://machenmcchesney.com/services/financial-planning-and-wealth-mangement-services/) Auburn-Opelika (334) 887-7022 | Montgomery (334) 244-8900 [![mm-re-cobrand-fd-blues](https://info.machen.cpa/hs-fs/hubfs/mm-re-cobrand-fd-blues.png?width=279&height=100&name=mm-re-cobrand-fd-blues.png)](http://machenmcchesney.com) Search this site on Google Search Google Search this site on Google Search Google - [Client Portal](https://machenmcchesney.sharefile.com/Authentication/Login) - [1040 Electronic Organizer](https://www.my1040data.com/account/login/HT7902990) - [LinkedIn](https://www.linkedin.com/company/675439?trk=tyah&trkInfo=idx%3A1-1-1%2CtarId%3A1424436970395%2Ctas%3Amachen+mcchesney) - 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[Benefits](http://machenmcchesney.com/careers/benefits/) - [Our Stories](http://machenmcchesney.com/careers/our-stories/) - [Current Openings](http://machenmcchesney.com/careers/current-openings-send-resume/) - [Accounting Internship Opportunities](http://machenmcchesney.com/careers/students/) - Contact Us - [Auburn-Opelika Office](http://machenmcchesney.com/contact-us/contact-us-auburn-office/) - [Montgomery Office](http://machenmcchesney.com/contact-us/contact-us-montgomery-office/) # Returning Value Blog ## [DOL Regulations on Tip Sharing](https://info.machen.cpa/blog/dol-regulations-on-tip-sharing) Posted by [Amber Cochran Saxon](https://info.machen.cpa/blog/author/amber-malik) on Jun 6, 2023, 10:32:20 AM - [Tweet](https://twitter.com/share) [![tips -1163497270-1](https://info.machen.cpa/hs-fs/hubfs/tips%20-1163497270-1.jpeg?width=1024&height=300&name=tips%20-1163497270-1.jpeg)](https://info.machen.cpa/blog/dol-regulations-on-tip-sharing)Under the Fair Labor Standards Act, employers with tipped workers can take a "tip credit," which allows them to pay tipped workers less than the federal minimum wage if the employees' tips make up the difference. Employers who do not take the tip credit and pay the full minimum wage can require tipped workers (e.g., servers) to share or pool their tips with nontipped workers (e.g., dishwashers and cooks). Employers, including managers and supervisors, are prohibited from receiving or keeping any portion of employees' tips, regardless of whether the employer takes the tip credit. The final rule also clarifies the position of managers and supervisors who receive tips directly from customers. **The DOL's position** Per the new final rule, managers and supervisors can keep tips they receive from customers for services they "directly and solely" provide. In addition, managers and supervisors cannot receive tips from tip-pooling arrangements, but they can contribute a portion of their tips to such arrangements. In fact, the employer can require managers to make this contribution. For example, managers who directly and solely serve customers during their shifts can receive tips directly from those customers. The managers can contribute those tips to the restaurant's tip-pooling arrangement, but they cannot receive any tips from the tip pool. The final rule explains that a "manager or supervisor" is a person who meets the duties test under [29 CFR Section 541.100(a)(2)-4 or Section 541.101](https://www.customsmobile.com/regulations/expand/title29_chapterV_part541_subpartB_section541.101?utm_campaign=Quarterly%20Newsletter&utm_source=hs_email&utm_medium=email&_hsenc=p2ANqtz-_g-_sIH5gRuYFTw2GG8I6XhE4S_rRPQ74PVJ9jdQQpO98V0U2c99FSRl5FO-mp3v8MfQtX). **Employer penalties** Based on the new final rule, the DOL can impose penalties of up to $1,162 per violation on employers who violate the FLSA's tip provisions, regardless of whether the violations are repeated or willful. According to the law firm Fisher & Phillips, "This is significant as DOL civil money penalties as to minimum wage and overtime violations are limited to repeated or willful conduct by an employer." For repeated or willful violations, the DOL can assess a penalty of up to $2,074 per violation. **Key takeaways** - Managers and supervisors can keep the tips they receive from customers based on the service that they "directly and solely" provide. They can share those tips via the employer's tip-pooling arrangement, but they cannot receive tips from the tip pool. - Employers can face civil money penalties for violating the FLSA's tip-pooling provisions, even if the offense is not repeated or willful. Remember to consult state law, as some states have their own tip-pooling requirements that differ from federal law. **For more information on the above article or any** [**human resource management services**](https://focuspaysolutions.com/services/human-resources/?__hstc=31761121.6de975eee04bf28563fdf1daa415e270.1659647291102.1685987636051.1686065476902.409&__hssc=31761121.3.1686065476902&__hsfp=2393331666)**, please contact Amber Malik at (334) 321-4729 or by leaving us a message below.**       Copyright 2023 Topics: [Payroll, HR & Benefits](https://info.machen.cpa/blog/topic/payroll-hr-benefits) Search this site on Google Search Google ### Recent Posts ### Subscribe to Blog ### Posts by Category - [Business Tax (356)](https://info.machen.cpa/blog/topic/business-tax) - [Business Advisory (239)](https://info.machen.cpa/blog/topic/business-advisory) - [Payroll, HR & Benefits (124)](https://info.machen.cpa/blog/topic/payroll-hr-benefits) - [Audit & Assurance (113)](https://info.machen.cpa/blog/topic/audit-assurance) - [Accounting & Outsourcing (81)](https://info.machen.cpa/blog/topic/accounting-outsourcing) - [Individual Tax (75)](https://info.machen.cpa/blog/topic/individual-tax) - [Tax Planning (33)](https://info.machen.cpa/blog/topic/tax-planning) - [Tax Updates (25)](https://info.machen.cpa/blog/topic/tax-updates) - [Retirement & Wealth Management Planning (18)](https://info.machen.cpa/blog/topic/retirement-wealth-management-planning) - [Taxation (15)](https://info.machen.cpa/blog/topic/taxation) - [Alerts (13)](https://info.machen.cpa/blog/topic/alerts) - [Business Valuation (11)](https://info.machen.cpa/blog/topic/business-valuation) - [News & Events (11)](https://info.machen.cpa/blog/topic/news-events) - [Tax News (11)](https://info.machen.cpa/blog/topic/tax-news) - [Individual Tax Planning (10)](https://info.machen.cpa/blog/topic/individual-tax-planning) - [Not For Profit (10)](https://info.machen.cpa/blog/topic/not-for-profit) - [Retirement Planning (9)](https://info.machen.cpa/blog/topic/retirement-planning) - [Estate Planning (8)](https://info.machen.cpa/blog/topic/estate-planning) - [Manufacturing Industry Insights (7)](https://info.machen.cpa/blog/topic/manufacturing-industry-insights) - [Individuals (1)](https://info.machen.cpa/blog/topic/individuals) - [Insider (1)](https://info.machen.cpa/blog/topic/insider) - [Professional Standard News (1)](https://info.machen.cpa/blog/topic/professional-standard-news) see all [![Returning\_Value](https://info.machen.cpa/hs-fs/file-2504250850-jpg/Machen-Blog-Image/Returning_Value.jpg)](http://machenmcchesney.com/about-us/mission-and-values/) - [![AICPA](https://machenmcchesney.com/img/logos/aicpa.jpg)](https://www.aicpa-cima.com/) - [![NACVA](https://machenmcchesney.com/img/logos/nacva.jpg)](http://www.nacva.com/) - ![2026 INSIDE Public Accounting Top 400](https://machenmcchesney.com/img/2026-ipa-top-400.jpg) - ![2026 Best of Auburn-Opelika](https://machenmcchesney.com/img/2026-best-of-auburn-opelika.jpg) - [![2025 Best of OA](https://machenmcchesney.com/img/2025-best-of-oa.jpg)](https://oanow.com/exclusive/readerschoice/ballot-2025/) - ![2026 Best of OA Winner](https://machenmcchesney.com/img/2026-best-of-oa-winner.jpg) - [![2025 Accounting Today Regional Leaders](https://machenmcchesney.com/img/2025-accounting-today-regional-leaders.jpg)](https://www.accountingtoday.com/) - [![ClearlyRated Best of Accounting](https://machenmcchesney.com/img/2024-best-of-accounting.jpg)](https://www.clearlyrated.com/accounting) - [![ClearlyRated Best of Accounting Employee](https://machenmcchesney.com/img/2024-best-of-accounting-employee.jpg)](https://www.clearlyrated.com/accounting) 1820 East University Drive, Auburn, AL 36830 | Tel: (334) 887-7022 | Fax: (334) 887-7221 1761 Taliaferro Trail, Montgomery, AL 36117 | Tel: (334) 244-8900 | Fax: (334) 364-0927 † This is not a CPA firm. \* Assurance, attest, and audit services provided by Frazier & Deeter, LLC. “Frazier & Deeter” is the brand name under which Frazier & Deeter, LLC\* and Frazier & Deeter Advisory, LLC† and its subsidiary entities provide professional services. 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