The DOL Wage & Hour Division issued its first Opinion Letter of 2025 (FLSA2025-1) on January 14, 2025, stating that managers and supervisors, no matter their duties during a particular shift, cannot participate in employee tip pools under the federal Fair Labor Standards Act (FLSA). The Opinion extends long-standing DOL guidance, but it is a reminder to tread carefully—especially as you also attempt to comply with Minnesota’s own, unique tip-pooling provisions of the Minnesota Fair Labor Standards Act (MFLSA).
The opinion letter involved a “quick service restaurant” and a tip pool that included crewmembers, shift leads, assistant team leads, and team leads when engaging in team-based customer service, and occasional periods when only team leads and assistant team leads were working and receiving tips.
The DOL reached several important conclusions for Minnesota restaurants to consider:
- First, a manager who works a shift “in a non-supervisory capacity” still cannot participate in a tip pool during that shift. Despite Minnesota law not necessarily prohibiting this, under federal law an employer may not allow managers to keep any portion of other employees’ tips, including from a tip pool.
- Second, the determination of whether someone is a manager (and excluded from a tip pool) is based on the worker’s primary job duties considered on at least a workweek basis—not shift-by-shift.
- Third, if a manager is providing direct customer service and receives a tip, that manager may keep that tip. That conclusion is consistent with Minnesota law. But if a group consisting only of managers receives a tip, they may not pool it.
The DOL Opinion is a reminder of the obstacles to implementing mandatory tip pools in Minnesota, as restaurants face the pincer of both state and federal law. Restaurants should be very careful about which employees may participate in mandatory tip pools.
