PaidFairTip pooling policy template
Answer a few questions and get a written tip policy you can print, post in the back, and hand to new hires. Free, no signup, nothing stored.
A tip pooling policy should say who is in the pool, how tips are divided, what the tip-outs are, when people get paid, and who to ask if a number looks wrong.
Federal law doesn't mandate a specific document, but it does require advance notice before an employer takes a tip credit — and the employer carries the burden of proving compliance. A dated written policy is how you carry it. It also ends most arguments before they start, because the rule was on the wall before the shift instead of explained after it.
A tip credit means paying the lower tipped cash wage and counting tips toward minimum wage. This single answer decides who may legally be in your pool.
Managers, supervisors, and owners are never eligible for a mandatory pool, so they aren't listed.
Heads up — this combination is a problem. You've said you take a tip credit and that kitchen staff are in the pool. Under federal law those two can't both be true: taking a tip credit limits the pool to customarily tipped front-of-house employees.
Either pay the full minimum wage in cash and drop the tip credit, or take the kitchen out of the pool. Worth confirming with an employment attorney before you post this.
Percentages taken off the top before the remainder is split.
Your policy
Print it, sign it, post it where staff can see it, and give a copy to every tipped employee before their first shift.
Why the written policy matters more than the percentage
Almost every tip dispute is really a dispute about expectations. Someone thought the rule was one thing, the number came out another way, and there was nothing to point at. The percentage itself is rarely what people are upset about — being surprised is.
Legally it matters too. Employers carry the burden of proving that tips brought each tipped employee to full minimum wage and that the pool only included eligible people. A dated policy plus a per-shift record of who worked and what they received is what discharges that burden.
The policy is half of it. The record is the other half. PaidFair applies these exact rules automatically from real clock-ins, splits to the exact cent, and keeps the per-person record your policy promises — with the math shown to every person for their own number.
Free cash register forever. Everything else is $29/month per location with a 14-day trial — no card to start.
Questions
Does a restaurant legally need a written tip policy?
There is no federal rule requiring a specific document. There is a rule requiring advance notice to employees before an employer takes a tip credit, and there is the employer's burden of proving compliance. A written, dated policy is the practical way to satisfy both. Some states add their own notice requirements — check your state.
Can I change the policy later?
Yes, going forward. Give notice before the change takes effect rather than applying it to tips already earned, keep the old version on file, and date both. Changing a tip rule retroactively is the fastest way to turn a policy question into a legal one.
Do employees have to sign it?
Not necessarily, but having each tipped employee acknowledge receipt is cheap and settles the "nobody told me" argument permanently. The template includes a signature block for that reason.