If you run a restaurant or other business where tipping is prevalent, you’ve likely wondered if you should consider a tip-pooling policy. After all, tip pooling could potentially offer numerous benefits from increased teamwork to better customer service.
However, instituting a tip-pooling policy is not something you should do on a whim. There are state and federal laws that exist to protect tipped employees. You should do your research beforehand to make sure you’re creating a valid tip pool.
In this article, we’ll cover everything you need to know about tip pooling arrangements. We’ll go over what tip pools are, which businesses can implement them, and the pros and cons of doing so.
Lastly, we’ll touch on tip pooling regulations to help you better understand how to legally implement one of these policies in your small business.