Shuckers in the Pool: DOL Clarifies Tip-Pooling Rules for the Hospitality Industry

The Department of Labor’s (DOL) September 30, 2025 Opinion Letter FLSA2025-03 brings welcome clarity for restaurants and hospitality employers navigating complex tip pooling requirements. 

By way of background, a DOL opinion letter is an official written opinion on how a law applies to a specific workplace situation.  The letter responds to a request submitted to the DOL and is based solely on the facts articulated in the request.  Here, the request asked for an opinion concerning whether an employer may include “front-of-house” oyster shuckers in a restaurant’s tip pool with servers for whom the employer takes a tip credit under the Fair Labor Standards Act (FLSA). Under the FLSA, an employer may require employees for whom a tip credit is taken to contribute tips to a tip pool only if the pool “is limited to employees who customarily and regularly receive tips.”  A tip pool is shared with other service providers who do not receive tips directly from the restaurant’s customers but who frequently interact with customers.

In this Opinion Letter, the DOL opined that front-of-house oyster shuckers “may be considered employees that customarily and regularly receive tips” and, therefore, “may lawfully participate in a traditional tip pool with servers paid with a tip credit,” providing important precedent for similar customer-facing roles. This alert explains the DOL’s reasoning, clarifies tip pool participation rules, and outlines best practices for restaurant and hospitality employers.

 What the DOL Said

The DOL opined that seafood restaurants can include front-of-house oyster shuckers in tip pools alongside servers for whom the restaurant takes a tip credit.  According to the DOL, shuckers stationed at visible oyster bars who “directly service the customers by sharing and detailing oyster offerings” qualify as employees who “customarily and regularly receive tips” even though they do not receive tips directly from customers.  The DOL drew parallels between these oyster shuckers and sommeliers, occupations long accepted as qualifying for tip pool participation. 

 What It Means for Employers

This Opinion Letter confirms that front-of-house oyster shuckers may participate in traditional tip pools if they satisfy the “customarily and regularly receive tips” requirement by “engag[ing] in service-related functions and hav[ing] sufficient interaction with the customers who leave tips.”

• Traditional Tip Pools (With Tip Credit): Employers taking the tip credit can combine tips among qualifying front-of-house staff who interact frequently with customers who leave tips.  Front-of-house staff includes servers, bartenders, hosts/hostesses, sommeliers, and front-of-house oyster shuckers, among others. Employees who work in the kitchen or other areas where they do not directly interact with customers may not participate in traditional tip pools. As the DOL noted, kitchen-based oyster shuckers “do not have any direct contact with the restaurant’s customers” and therefore cannot be included in traditional tip pools.
• Nontraditional Tip Pools (No Tip Credit): When employers pay full minimum wage to all employees and forgo the tip credit, they may form broader tip pools that include back-of-house staff.
• Management Prohibition: Employers and managers may never retain any portion of employees’ tips.

 Key Compliance Considerations

• Customer Interaction as the Determining Factor: The DOL emphasized that “to be an individual who customarily and regularly receives tips, an employee must engage in service-related functions and have sufficient interaction with the customers who leave tips.” Physical proximity to customers, explanation of products or services, and visible food preparation all support tip pool eligibility. This precedent may apply to similar roles such as tableside guacamole preparers, cheese mongers, and wine pourers.  It is not a requirement that these front-of-house staff receive tips directly from customers.
• Mixed-Role Employee Challenges: For employees who work both qualifying front-of-house and non-qualifying back-of-house shifts, employers should document which shifts involve customer interaction and consider tip pool participation only for qualifying work periods.
• State Law Variations: Federal law establishes minimum standards, but some states impose stricter restrictions. Employers must comply with the most restrictive applicable law.
• Documentation Recommendations: When taking the tip credit, employers must provide written notice to each tipped employee explaining the credit amount and cash wage. Tip pool policies should be documented in employee handbooks or other documents provided to and accessible by staff.  Employers should maintain records demonstrating customer interaction levels and tip receipt patterns.

 Action Items for Employers with Established Traditional Tip Pools

• Review Tip Pool Composition: Audit your current tip pool roster. If taking a tip credit, include only employees who interact regularly with customers, including servers, bartenders, hosts/hostesses, sommeliers, and customer-facing specialty positions, using the standard articulated in this Opinion Letter. Exclude back-of-house staff unless you pay everyone at least the full minimum wage.
• Address Mixed-Role Employees: Develop policies for employees who work both qualifying and non-qualifying positions. Consider separate tip pool participation based on specific shifts.
• Update Policies and Training: Revise written tip pooling policies to reflect this Opinion Letter. Train managers on proper tip credit procedures. Ensure all staff understand who participates in tip pools.
• Implement Effective Record-Keeping: Document customer interaction levels, tip receipt patterns, and job duties. This documentation will be crucial in potential DOL investigations.
• Monitor State Law Developments: Stay informed about state and local tip pooling restrictions that may be more stringent than federal requirements.
• Maintain Strict Management Separation: Reinforce that no employer, manager, or supervisor may ever retain any portion of employee tips.
• Review Union Agreements: If your workplace is unionized, ensure tip pooling changes comply with existing collective bargaining agreements.
• Implement Changes Promptly: This Opinion Letter is effective immediately. Review and adjust tip pool arrangements to ensure compliance.

Conclusion

For questions regarding tip pooling compliance and its implications for your workforce, feel free to reach out to your Womble Bond Dickinson attorney, the authors of this Insight, or another member of our Labor and Employment Practice Team. We will continue to monitor wage-and-hour developments and provide updates as warranted, so make sure you are signed up for the Womble Bond Dickinson newsletter.