The U.S. Department of Labor filed a federal lawsuit against St. Paul Fish Company and its owners, alleging that managers at its Public Market location unlawfully participated in a tip pool. The suit follows a Wage and Hour Division investigation into the restaurant’s pay practices between June 2021 and June 2023, finding that two managers collected on the tips of as many as 35 employees.
Business Takeaway: Tip pooling is a costly and recurring compliance trap—particularly when job titles do not correspond with actual duties (e.g., when a shift lead actually functions as a manager, or vice versa). Employers using tip pools should verify, in practice (not just on paper), who can participate in them. Strong written tip-pool rules help, but they must be paired with payroll systems and protocols, including occasional audits of real-world operations. Have you run into any issues managing your tip pool system?