u/Dangerous_Lack_1863

I recently left a small family owned restaurant in NYC and have been trying to understand whether the tip pool was lawful. I have been in the industry for well over a decade, but this set up seemed unreasonable.

The restaurant had a mandatory tip pool that was divided based on hours worked. Servers and bartenders all contributed their tips to one common pool. For front of house employees I was the only full time front of house employee that worked alongside the owners that were in the tip pool. There was only one other part time employee in the front of house.

Two people who I understood to be owners also participated in the pool every week daily. One of them hired and fired employees, created schedules, and managed the operations of the restaurant. The other regularly bartended but also helped run the restaurant and also received a share of the pooled tips.

The owners worked shifts alongside everyone else, so I'm wondering whether that changes anything legally or if owners/managers generally aren't allowed to receive distributions from a mandatory tip pool.

I also never received my final paycheck after leaving, so I filed a complaint with the appropriate labor agency. I want to understand whether this kind of tip pool arrangement is common or whether it raises legal issues. What kind of loopholes would make this legal? I saw something about a 20% ownership rule and I know they have 2 other owner/investors based on a public liquor license.

If this is legal, I'm struggling to understand how the law addresses the obvious conflict of interest when the people deciding schedules, staffing, and discipline are also financially benefiting from the same mandatory tip pool.

Has anyone worked somewhere with a similar setup or dealt with something like this?

Location: NYC