Tip pooling is a customary practice in the food service and hospitality industries, where employees’ tips are collected and redistributed among staff. While employers have the right to implement tip pooling systems, they must adhere to specific legal guidelines to protect employees’ rights. These laws are particularly important for restaurant staff including waitstaff, bartenders, and cleaning staff who rely on tips as a sizable portion of their income. 

California’s Labor Code section 351 defines tips as voluntary gratuities left by customers for employees, in addition to the amount due for goods or services. These tips are the sole property of the employee. Tip pooling involves gathering tips earned by certain employees and dividing them among multiple staff members, often following an established formula. This practice can help balance earnings between peak and off-peak hours, reduce workplace competition, and alleviate workday strain.