Who gets the tips on to-go and takeout orders? Can the owner keep them?
The short answer
Example
A takeout order comes in online with a $6 tip. A counter employee bags it and hands it over (illustrative). Here’s where federal law lets that $6 go.
| Where the $6 goes | Allowed under federal law? |
|---|---|
| To the counter employee who handled the order | Yes |
| Into a tip pool with servers, bussers, and counter staff | Yes |
| Into a pool with cooks, when the employer pays everyone in the pool at least $7.25 an hour in cash wages | Yes |
| Into a pool with cooks, when servers in it are paid $2.13 | No |
| To a manager or supervisor, or kept by the owner | No |
| To pay for to-go containers or the delivery app’s fees | No. That’s using tips for a business expense. |
- Card fees: your employer can take out the card company’s actual fee on a card tip, and nothing more.
- Timing: tips your employer collects have to be paid out no later than the regular payday for that workweek.
Not tax or legal advice. The order and amount are made up. Your state may have stricter tip-pool rules.
Plain English
To-go tips are still tips
Federal regulations define a tip as money a customer chooses to give in recognition of service. They don’t make an exception for takeout, pickup, or online orders. The Fair Labor Standards Act says an employer “may not keep tips received by its employees for any purposes,” whether or not it pays $2.13. DOL’s investigator handbook says using tips to pay business expenses is keeping them.
What your employer can do with them
Federal rules allow exactly three things. Your employer can give the tip to the employee who received it. It can require employees to share tips in a pool with other eligible employees. Or it can collect the tips and pay them out to a pool of eligible employees. Anything else counts as keeping them.
Who can be in the pool
If your employer pays you $2.13 and counts your tips toward the minimum wage, the pool can include only employees who customarily and regularly receive tips, such as servers, bussers, counter staff who serve customers, and service bartenders. If it pays everyone the full $7.25 in cash wages and takes no tip credit, the pool can also include cooks and dishwashers. Either way, managers, supervisors, and owners can’t receive anything from it. DOL also says a tip jar is a form of tip pool.
When a manager or owner handles the order
A manager or supervisor may keep tips they get directly from customers for service they “directly and solely” provide. DOL’s example is a manager who is the only person working the last hour before a coffee shop closes. If others helped with the order, or the tip went into the pool, the manager can’t take a share.
If to-go tips are disappearing
Ask your manager in writing how to-go and online-order tips are paid out. If you don’t get a straight answer, see How do I report my restaurant for taking tips? Your state may have stricter rules; DOL keeps a list of state labor offices.
Common mistakes
- Assuming online-order tips belong to the restaurant because no server took the order.
- Letting a manager take a cut of the takeout tip jar.
- Not asking how to-go tips are split, then having no way to check your share.
Official sources
- 29 CFR 531.52, General restrictions on an employer’s use of its employees’ tipsecfr.gov
- 29 CFR 531.54, Tip poolingecfr.gov
- U.S. Department of Labor, Fact Sheet #15: Tipped Employees Under the FLSAdol.gov
- U.S. Department of Labor, Field Operations Handbook Chapter 30 (30d02, 30d07, 30d11, 30d12, 30d13)dol.gov
- U.S. Department of Labor, Wage and Hour Division: State Labor Officesdol.gov
Last verified:
Checked 29 CFR 531.52 and 531.54, DOL Fact Sheet #15, and DOL’s Field Operations Handbook Chapter 30 (30d02, 30d07, 30d11, 30d12, and 30d13, marked 03/03/2023).
Still open: Federal rules don’t say which employee “received” a tip on an online or phone order that no one person served. A tip pool that follows the rules above is one way employers handle it.