UPDATE: Employee Tip Pooling – Don’t Say We Didn’t Warn You!

We have talked with you in the past about the risks of allowing employees to pool or share tips. This is a pretty common practice in the food service industry, but there can be concerns because of the complexity of compliance with the Fair Labor Standards Act and state wage and hour laws. We also previously wrote about a decision that offered some guidance on how to implement tip pools safely. It turns out that the case, Ford v. Lehigh Valley Restaurant Group, is also a cautionary tale.

According to various news outlets, the case recently settled for about $1.3 million.

If you are still allowing employees to pool or share tips, please work with your wage and hour counsel to make sure the tip pools are structured appropriately.