Free restaurant template · Policy
Restaurant tip pooling policy template
Free to use and edit. These are starting drafts, not legal advice: have an employment attorney review any policy before you rely on it.
The template
[Restaurant name]
Tip Pooling Policy
Purpose
This policy explains how tips and service charges are collected, shared and paid at [Restaurant name]. Tips belong to the employees who earn them. The restaurant does not keep any part of a tip or service charge.
Who shares in the pool
The tip pool is shared only among employees who serve guests directly or make drinks for service, and who have no managerial responsibility on that shift. At this restaurant those roles are: [servers, bartenders, service bartenders, bussers, counter staff].
Owners, managers and anyone acting as a supervisor on a shift do not share in the pool on that shift. Kitchen staff do not share in the pool.
What goes into the pool
- [All / __%] of card and cash tips received by pool members on the shift
- All service charges and automatic gratuities added to guest bills
- No deduction is made for card processing fees, breakage, walkouts or cash shortages
How the pool is split
The pool for each shift is divided by [hours worked on the shift / points assigned to each role, as listed below]. The split is recorded on the nightly tip-out sheet, which any pool member may ask to see.
| Role | Points (if using points) |
|---|---|
When tips are paid
Tips are paid [in cash at the end of each shift / through payroll on the next regular payday for the pay period in which they were earned].
Reporting and pay
- Employees report all tips they receive so the restaurant can withhold taxes correctly.
- Employees paid the tipped service rate receive at least the full minimum wage for every shift once tips are counted. If tips fall short on a shift, the restaurant makes up the difference.
- Time spent counting and dividing tips at the end of a shift is paid time.
Questions and concerns
Bring any question about a tip split to [name or role]. No one will be penalized for asking about, or complaining about, how tips or wages are paid.
I have read this policy and had the chance to ask questions about it.
Employee:Date:
Manager:Date:
Starting draft from Back of House Ops (backhousehr.com). Edit it to fit your restaurant. It is not legal advice.
Massachusetts rules
The rules that apply to this document
Who is allowed to share in a tip pool in Massachusetts?
Only wait staff, service bartenders and service employees. Wait staff means people who serve food or drink directly to customers or clear their tables, including bussers and counter staff in quick-service restaurants, and who have no managerial responsibility that day.
Full answer and official sourceCan cooks and dishwashers share in the tips?
No. Kitchen staff do not serve customers directly, so under the Massachusetts Tips Act they cannot receive tips or service-charge money. The narrow exception is counter staff in a quick-service restaurant who prepare or serve food as part of a counter team.
Full answer and official sourceCan a manager, shift lead or owner share in the tip pool?
Owners never can. A manager or supervisor cannot share on any day they have managerial responsibility, even if they also served tables. The Attorney General names shift supervisors, assistant managers, banquet captains and many maître d's.
Full answer and official sourceWhen can a Massachusetts restaurant pay the $6.75 tipped service rate?
Only when all of these are true: you told the employee about the rule in writing, they customarily receive more than $20 a month in tips, they keep all their tips or receive them through a lawful tip pool, and the $6.75 plus their tips reaches at least $15.00 an hour. If any condition fails, you pay the full $15.00.
Full answer and official sourceHow do I check that a server's tips brought them up to $15?
Shift by shift. Since January 1, 2019, the employer must compare the service rate plus tips against the minimum wage at the end of each shift, and add any shortfall to the next paycheck. A busy Saturday cannot average out a slow Tuesday.
Full answer and official sourceWhen do tips and service charges have to be paid out?
The Tips Act says by the end of the same business day, and never later than the normal Wage Act payday. The Attorney General's Fair Labor Division treats tips as paid on time if they are paid by the end of the pay period in which they were earned.
Full answer and official sourceWhat is the difference between a service charge and a house or administrative fee?
A service charge is any fee a customer would reasonably expect to go to the staff, including anything called a gratuity, a tip or a vague "service fee", and all of it must go to the wait staff, service bartenders or service employees who provided the service. A house, administrative or kitchen fee can be kept by the business or shared with the kitchen, but only if you clearly tell customers it is not a tip.
Full answer and official sourceWhat happens if a restaurant breaks the Tips Act?
The employer repays the tips with 12% annual interest and can face Attorney General citations of up to $25,000 per violation and criminal penalties. Employees can also sue on their own, and a winning employee is automatically awarded triple damages plus attorney's fees.
Full answer and official source
Rules checked against official sources on . General information, not legal or tax advice.
Where restaurants go wrong
- Copying a tip-share policy from another state that gives the kitchen a percentage. Federal law allows that in some cases; Massachusetts does not.
- Listing job titles without checking what each person actually does on a shift.
- Having a policy on paper and a different split in practice. The nightly sheet has to match.
Your restaurant remains the employer of record and approves payroll and employment decisions. BOHO is not a PEO, a staffing agency, or legal counsel. This template is a starting draft for you to edit. It does not decide how the rules apply to your restaurant, so have counsel review any policy or separation before you rely on it.
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Your restaurant remains the employer of record and approves payroll and employment decisions. BOHO is not a PEO, a staffing agency, or legal counsel.