This morning, while watering my plants, I suddenly found myself laughing. The water that collects in the pot tray eventually seeps back into the soil, but if someone secretly takes that water, the plant will just dry up.

This thought came to me because of a conversation I had yesterday with a friend who works part-time at a café. They mentioned that the manager takes a cut from the tip jar.

My friend said that this is just how things are, but I felt something was off. So, instead of writing in my garden journal last night, I spent quite a while digging through labor law resources.

To cut to the chase, under federal law, it is illegal for an employer or manager to take employee tips. The same goes for sharing tips through a tip pool.

The basis for this is found in the Fair Labor Standards Act, commonly referred to as FLSA, specifically in section 3(m)(2)(B). Employers cannot keep tips received by employees for any reason, and it is also prohibited for managers or supervisors to take a portion of those tips.

Interestingly, this regulation applies equally whether or not tip credits are used. This means that the argument that since the hourly wage exceeds the minimum wage, tips can be taken freely does not hold up.

Now, you might wonder who qualifies as a manager. The federal Department of Labor looks at the actual duties performed rather than job titles.

In simple terms, if a person manages others, directs the work of two or more employees, and has a significant impact on hiring or firing, they are considered a manager, regardless of what their name tag says.

But then a question arises: what if a manager also serves tables or bartends on busy days? The Department of Labor has already addressed this as well.

In a January 2025 opinion letter, the Department stated that managers cannot receive money from the tip pool on days they work like regular employees. The FLSA2026-13 opinion letter released on September 7, 2026, reached the same conclusion.

This opinion involved a restaurant shift supervisor who helped out as a bartender while also assisting hosts and busboys. Even so, if they meet the managerial criteria, they cannot participate in the tip pool.

However, there is one exception. If a manager personally serves a customer and receives a tip from that customer, they can keep that tip.

Conversely, if an employee who is not a manager is the most senior staff member working that day, they can receive from the tip pool. This means that seniority does not lead to disadvantages.

Now, let's move on to New Jersey. According to the New Jersey Department of Labor, the minimum wage in 2026 is $15.92 per hour for most employers.

For employees who receive tips, if the employer applies a tip credit, they can reduce the cash wage to as low as $6.05 per hour. The maximum tip credit is $9.87.

Here's an important point: if the combined amount of the cash wage and tips falls below the minimum wage, the employer must make up the difference.

Additionally, to use a tip credit, the employer must inform the employee of this in advance. If they fail to do so, they must pay the full minimum wage as the hourly rate.

The tip pool itself is not illegal. Employers can decide to have employees who regularly receive tips pool their tips together and share them.

The issue lies in who has access to that pool. Employers, managers, and supervisors must be excluded, and employees must be informed about how much they contribute and how it is distributed.

If an employer wrongfully takes tips, what happens? The FLSA stipulates that they must pay back the full amount taken, along with an equal amount in damages.

Moreover, if tips are improperly taken, there is a risk that the tip credit itself may not be recognized. From the employer's perspective, trying to take a few dollars could lead to losing a lot more.

So, what should someone in a situation like my friend do? I would quietly jot down the work date, hours worked, and the amount of tips received in my phone notes.

If there is a tip distribution chart or a group chat announcement, it's a good idea to take a screenshot. Having a record of who received what can be very helpful later on.

Also, make sure to keep your pay stubs. You can compare how tips were recorded and what the cash wage was later on.

Next, you can contact the Wage and Hour Division of the federal Department of Labor or the Wage and Hour Division of the New Jersey Department of Labor. If the situation is complicated, consulting a labor law attorney is also an option.

I understand that it can be harder to bring these issues up when working at a Korean-owned business due to relationships. When you're on friendly terms with the owner, it can feel awkward to discuss these matters.

However, tips are a way for customers to express gratitude to the person who served them. I believe it's not right for that gratitude to end up in the wrong pockets.

Many owners may not do this intentionally but rather out of ignorance, following practices they've always known. It would be a good opportunity to review our tip distribution practices in our businesses.

If there's one thing I've learned from gardening, it's that water needs to reach the roots for flowers to bloom. Tips should also reach the hands of those who worked hard to ensure the business thrives.

Tonight, I plan to secretly send my friend a link to this article. Think of it as a little watering from a hidden gardener.