DOL Opinion Letter Addresses Tip Pool Rules For Supervisors Performing Line Work

On January 14, 2025, the Department of Labor (DOL) issued an Opinion Letter on whether a “quick service” restaurant’s supervisors can share in a tip pool when they work a full shift as a non-supervisor. The DOL explained that a supervisor can never participate in a tip pool, even when they spend an entire shift performing line work. The only time a supervisor can receive a tip is when they receive it directly from a customer based on service the supervisor directly and solely provided. 

The quick service restaurant uses four classifications of employees: Crew Members, Shift Leads, Assistant Team Leads, and Team Leaders. The Assistant Team Leads and Team Leaders are considered supervisors under the Fair Labor Standards Act’s executive exemption. The restaurant’s employees serve meals assembled to order on a line; customers select, receive and purchase their food before finding a table. Tips are pooled and split among the employees working the serving line and performing other non-supervisory duties. 

The restaurant explained that due to staffing challenges, there are times when a supervisor performs non-supervisory duties for an entire shift or when a shift is staffed solely by supervisors. They asked the DOL whether supervisors could receive pooled tips in those circumstances. The DOL’s answer was a resounding: No. 

The DOL explained that the determination of whether a worker is a supervisor does not vary from shift to shift and is instead based upon their primary duty on at least a workweek basis. “To permit an individual whose primary duty (based on their job as a whole) is management to receive tips from a tip pool because the individual works a shift in a non-managerial capacity would circumvent the statutory prohibition against allowing managers or supervisors to keep any portion of other employees’ tips.” Moreover, because managers and supervisors are not allowed to have their own tip pools, they also cannot receive pooled tips when only supervisors staff a shift. 

The second question the restaurant posed was whether Shift Leads, who are the highest-ranking employee during certain shifts, could participate in the tip pool. The DOL stated: yes. “If the Shift Lead’s primary duty (based on their job as a whole) is not management, the employee does not meet the executive duties test and therefore, is not a manager or supervisor prohibited from receiving tips from an employer-mandated tip pool.” 

This opinion letter’s practical application of existing tip pool rulesdemonstrates how careful employers must be to ensure supervisors and managers never participate in tip pools, even if they work in dual roles. Moreover, it serves as a good reminder to ensure your supervisors are properly classified. If you have questions about this opinion letter or tip pools, please contact a KZA attorney.   

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