A hotel tip pool fails one person at a time: the banquet captain who also writes the schedule, the dishwasher added while a tip credit is in force, the 3% knocked off for card fees in a state that forbids it. This tool takes the actual roster — duties, hours, points — and returns a member-by-member verdict under the federal rules plus the deep state overlays, splits a pool to the cent, and classifies a service charge with its downstream wage, tip-credit, and tax consequences. Inputs never leave your browser.
The federal manager ban after Opinion Letter FLSA2025-1#
Since 2018, FLSA §3(m)(2)(B) has barred employers — and their managers and supervisors — from keeping any portion of employees' tips, including through a mandatory pool. The line is the executive duties test of 29 CFR 531.52(b): management as a primary duty, customarily directing two or more full-time-equivalent employees, and authority (or particular weight) in hiring and firing. Opinion Letter FLSA2025-1 (Jan. 14, 2025) closed the loophole hotels most wanted open: a qualifying manager is out of the pool even where the supervision is sporadic, and may keep only tips received directly from a guest for service the manager directly and solely provided. A working food-and-beverage manager who buses tables on busy nights does not buy a pool share with the bussing — the duties, not the shift mix, control.
The back-of-house gate#
Whether cooks, dishwashers, and stewards can share turns entirely on the tip-credit election (29 CFR 531.54(c)–(d)). Take a tip credit anywhere in the pool, and the mandatory pool is limited to employees who customarily and regularly receive tips — eligibility turns on actual duties and customary tipping, not guest contact alone. Pay the full minimum wage in cash and take no credit, and the employer may run a "nontraditional" pool that brings back-of-house in. In the no-credit states — California and Washington among the deep overlays here — the federal back-of-house gate is open, while any stricter state membership rules still apply. The tipped overtime calculator shows what the credit election does to the rest of the paycheck.
The state overlays#
| State | Pool membership | Card fees on tips | Service-charge model |
|---|---|---|---|
| California | Chain of service: back-of-house may share (no tip credit exists), but owners, managers, and supervisors are out regardless of guest contact (Chau v. Starbucks; Leighton v. Old Heidelberg). | No deduction — the full charged tip is due by the next regular payday (Cal. Lab. Code §351). | Presentation test (O'Grady): a charge presented as a gratuity without disclosed retention is likely owed to staff; LA, Santa Monica, West Hollywood, and Long Beach hotel ordinances independently mandate full pass-through. |
| New York | Occupation list plus the Barenboim "meaningful authority" test — an agent with real authority over staff is barred even if they also serve guests. Separately, two hours or more, or more than 20% of a shift, on non-tipped work kills the tip credit for that day (12 NYCRR 146-2.9). | Pro-rata share of the processing fee on the tip may be deducted (12 NYCRR 146-2.20). | Banquet and purported-gratuity charges are presumed gratuities unless retention is clearly disclosed in the contract and on the bill (World Yacht; 12 NYCRR 146-2.18–146-2.19). |
| Massachusetts | Statutory roles only — wait staff, service employees, service bartenders. Wait staff may have no managerial responsibility on the service day; service employees may have none, and violations are trebled mandatorily. | No deduction from tips or service charges (M.G.L. c.149 §152A(b)–(c)). | Statutory distribution: any service charge must go entirely to the statutory roles; a retained house fee needs unmistakable labeling (M.G.L. c.149 §152A(d)). |
| Hawaii | Federal baseline membership; tips protected as employee property (HRS §388-6). | No verified state rule — check current guidance before deducting. | Disclose or distribute: a food-or-beverage service charge is either paid out in full as tip income or its retention clearly disclosed (HRS §481B-14; Villon v. Marriott). |
| Washington | No-credit open pool: back-of-house may share; managers and supervisors remain excluded (RCW 49.46.020(3); L&I Admin. Policy ES.A.12). | No verified state rule — check current guidance before deducting. | Disclosure percent: menu and receipt must state the employee percentage of any automatic service charge; the undisclosed portion belongs to the employees (RCW 49.46.160). |
Eight more states with their own rules#
- Minnesota & New Hampshire — the hardest line in the country: employer-required pooling is prohibited outright. A gratuity is the sole property of the employee, and only employee-initiated sharing — agreed without employer coercion or participation — is lawful; the employer may administer, suggest, document, and mediate, but may not compel participation (Minn. Stat. §177.24, subd. 3; N.H. RSA 279:26-b). The designer returns an unlawful verdict for any mandatory pool in either state.
- Nevada — the opposite pole: no person may take any part of employees' tips or credit them against the minimum wage (NRS 608.160), but employer-mandated pooling, even across ranks, is lawful so long as every dollar goes to employees (Wynn Las Vegas v. Baldonado, 129 Nev. 734 (2013)). The federal manager ban still keeps supervisors out of the money.
- Connecticut — the tip credit runs through paperwork: statutory cash floors of $6.38 (wait staff) and $8.23 (bartenders) under Conn. Gen. Stat. §31-60(b), gratuities counted only if recorded and substantiated by substantial evidence of actual gratuity receipt (Regs. §31-62-E3), and a 2-hour/20% non-service rule that kills the credit by the day (§31-62-E3a).
- Oregon — no tip credit exists (ORS 653.035(3)), so the federal gate permits nonmanagement cooks and dishwashers in required pools. Montana also forbids a tip credit, but MCA 39-3-218 independently limits pools to customer-service or food-preparation employees, excludes exempt salaried managers/supervisors, and requires employee notice, records, and regular-payday distribution. ARM 24.16.3022 permits only the actual proportional card-tip processing cost, documented in employer records.
- Illinois — federal membership rules, but the credit is capped at 40% of the minimum wage with a substantial-evidence burden (820 ILCS 105/4(c)), and gratuities must be paid over within 13 days of the period's end (820 ILCS 115/4.1). Chicago and Cook County run higher tipped floors on their own schedules.
- Kentucky — as of April 10, 2026, required pools may include tipped employees but must exclude salaried employees, managers, and supervisors. Custodial funds must be segregated and open to participant inspection (KRS 337.065).
- Colorado — required sharing is lawful only after each patron is told in writing — menu, table tent, or receipt — that gratuities are shared (C.R.S. 8-4-103(6)), and the statewide credit is $3.02 ($12.14 cash against $15.16 in 2026). Qualifying food-and-beverage employers under specified higher local minimums may use up to $4.00 subject to the state cash floor and local rules. Enter whether the patron notice was given; without it, a required Colorado pool is unlawful as designed.
Dual jobs by the day, and the paperwork gates#
Two of these rules turn on facts the roster alone cannot show, so the tool now takes them as inputs rather than merely flagging them. The federal dual-jobs question — whether a tipped worker spent so long on non-tipped work that the credit fails — is, after the 2024 vacatur of the 80/20/30 rule, an occupational test rather than a stopwatch; but New York (12 NYCRR 146-2.9) and Connecticut (Regs. §31-62-E3a) keep a hard daily line: two hours or more, or more than 20%, of a shift on non-tipped work forfeits the tip credit for that day. Enter each member's non-tipped hours and shift length and the designer prices that day's lost credit — without dropping the worker from the pool, because losing the day's credit and losing pool membership are different consequences. Connecticut adds a second gate: the credit stands only on recorded gratuities and substantial evidence of actual receipt (Regs. §31-62-E3), so a clean roster reads "at risk" until you confirm the required records and evidence are on file, then "lawful."
Service charge or tip — why the label drives everything downstream#
A mandatory service charge is never a tip under federal law (29 CFR 531.55), and that one classification ripples through three separate systems. The regular rate: distributed service charges are wages, so they raise the regular rate and every overtime premium computed on it — a tip never does. The tip credit: service-charge distributions cannot fund the credit; an employer counting banquet-charge payouts toward the tipped minimum is underpaying. The tax line: distributed service charges are wages for FICA, not tips, so the employer owes its FICA share on them and earns no IRC §45B FICA tip credit (Rev. Rul. 2012-18); and under the OBBBA no-tax-on-tips deduction, only voluntary tips are "qualified tips" — distributed service charges are excluded and do not belong in W-2 Box 12 code TP (T.D. 10044 (2026)), so mislabeling a charge as a tip misstates the worker's taxes too. The same dollars can be lawful as a disclosed administrative charge and a violation three ways as an undisclosed one. Enter the distributed amount, the staff-hours it covers, and the overtime hours within them, and the classifier computes all four consequences — the per-hour regular-rate uplift, the added half-time overtime premium, the FICA/§45B treatment, and the OBBBA exclusion.
A worked banquet example#
New York hotel wedding, $20,000 food and beverage, 22% service charge = $4,400. The contract and bill say nothing about who keeps it. Under 12 NYCRR 146-2.18 the charge is presumed a gratuity: the full $4,400 belongs to the service staff. Distribute it, and it becomes wages — a server who takes a $550 share across a 50-hour week sees her regular rate rise by $11.00/hour ($550 ÷ 50), which adds $5.50 of premium on each of her 10 overtime hours ($55.00 for the week) on top of the $550 itself. None of the $550 is an OBBBA qualified tip. Had the contract and the bill clearly stated the charge was for administration and not distributed to staff, the presumption flips and the house may keep it — but then nothing reaches the staff, the regular rate, or the tip line at all.
What this tool does not do#
- It tests pool membership, distribution math, and the service-charge classification with its downstream wage, FICA, and tax consequences — not the full paycheck; run the tipped overtime calculator for that.
- The "meaningful authority" and presentation tests are fact questions; the tool flags the line and cites the cases, it does not decide them. The same is true of the federal dual-jobs occupational test — the tool computes only the New York and Connecticut daily rules, which are bright lines.
- The credit-card fee falls only on the card-paid portion of the tips when you supply that amount; left blank, it is applied to the whole pool and labeled as the conservative approximation it is.
- Deep overlays cover fourteen states; everywhere else the federal rules run with the state's own statute summarized, not silently skipped.
Background: tip pooling · service charges · the tip credit. This tool is educational and illustrative — see the disclaimer.