What federal change allowed certain back-of-house employees to share in a tip pool?

Short answer

Congress amended the Fair Labor Standards Act in 2018 to prohibit employers from keeping employees’ tips, including by allowing managers or supervisors to keep part of them, whether or not the employer takes a tip credit; the law also displaced specified earlier tip regulations pending future Wage and Hour Division action. [1]

The Department of Labor’s 2020 rule explained that this change removed the earlier regulatory restriction on an employer that does **not** take a tip credit, allowing a nontraditional tip pool that can include employees such as cooks and dishwashers. [2]

Under 29 CFR 531.54 as displayed current through October 22, 2026, an employer may include those employees only when it pays its tipped employees the full minimum wage and does not take a tip credit; an employer, manager, or supervisor may not receive tips from that pool, and a tip-credit pool remains limited to employees who customarily and regularly receive tips. [3]

This is a general federal overview. It does not determine whether the FLSA governs a particular workplace or whether state, territorial, tribal, local, collective-bargaining, contract, coverage, job-duty, or actual-pool-distribution rules change the result. The eCFR display was retrieved October 25, 2026, but stated that Title 29 was up to date only through October 22, 2026; no conclusion is made about whether an intervening change occurred. [3]