Tip Pooling & Distribution Policy

Policy governing how tips are collected, pooled, and distributed among salon employees, including rules for assistants and receptionists.

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What this document covers

The FLSA regulates tip pooling and distribution in salons. Employers who take a tip credit can only include traditionally tipped employees (stylists, barbers, aestheticians) in tip pools. Employers who don't take a tip credit may include non-traditionally tipped employees (assistants, receptionists, shampoo technicians) but NEVER managers or supervisors. This policy defines your salon's tip handling procedures.

Key sections included

Tip ownership rights
Tip pool participation by role
Tip credit vs. non-tip-credit employer rules
Manager and supervisor exclusions
Tip distribution calculation method
Credit card tip processing
Recordkeeping requirements
State-specific tip pooling rules

Frequently asked questions

Can receptionists be in the tip pool?

Only if the employer does NOT take a tip credit. Under the 2018 law, non-tip-credit employers may include receptionists, shampoo assistants, and other non-traditionally tipped employees.

Can salon managers participate in tip pools?

No. Managers and supervisors are categorically excluded from tip pools under the FLSA, regardless of whether the employer takes a tip credit.

Document details

Legal basis: Fair Labor Standards Act (29 USC §203(m)); Consolidated Appropriations Act 2018
Enforced by: U.S. Department of Labor, Wage and Hour Division
Penalty for absence: Full back-tip liability to employees. Liquidated damages (double damages). Manager tip pool violations: must return all tips taken.
Category: Employment & HR

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