Tip Pooling Among Employees: Do Not Jump Right In

Jul. 19, 2017

Last week, a judge ruled in favor of a former bartender from Surly Brewing Co., who filed suit against the brewery on behalf of over 100 current and former bartenders and wait staff who have worked at Surly starting in 2014.  The lawsuit claimed that Surly violated Minnesota law by requiring servers and bartenders to pool their tips and share them with non-tipped employees, such as hosts.  The Hennepin County District Court judge agreed with the employee, ruling as a matter of law that the tip-pooling policy violated the Minnesota Fair Labor Standards Act.

Tip pooling, while not uncommon in the taproom/cocktail room context, must be handled properly by breweries, distilleries, and wineries.  How to properly handle a tip pool, however, is not always clear, particularly in Minnesota where employers are prohibited from requiring employees to share tips.  There are several questions that employers have to grapple with, including:

  • How can an employer ensure it is complying with the laws prohibiting the requirement of tip pooling?  For example, if a brewery puts a bartender in a host role because that employee refuses to share tips, is that a violation?
  • What can an employer do to paper its compliance so that if an issue arises, it has evidence of its compliance?
  • What role, if any, can an employer play in administering a tip pool?  Can the employer divide tips among those employees that have agreed to pool tips, or does the employer have to stay out of it entirely?
  • Who can share in a tip pool?  What about taproom or cocktail room managers?

Unsure if your current tipping policies comply with Minnesota law? Give us a call. We’ve helped other breweries set policies and decide how to communicate with employees regarding tipping in their taprooms, and would be happy to talk with you about the same!