Maine Expands Tip Pool Eligibility to Non-Service Employees

In June 2023, Maine passed into law “An Act to Establish Parity in Tipping Laws for Restaurant Workers,” which gives Maine employers more flexibility in structuring their tip pools.

The Key Change: Non-Service Employees Can Now Participate

Previously, Maine law limited tip-pooling arrangements to include only front-of-house, service staff (i.e., those who receive more than $180 tips per month).  Under Maine’s new law, employers can now expand their tip pools to include non-service employees (e.g., kitchen staff or dishwashers) who typically do not receive tips. Non-service employees contribute to a customer’s experience but rarely receive customer gratuity.  Sharing tips earned by service staff with non‑service staff can foster a more collaborative work environment and boost overall morale.  Under Maine’s new law, businesses have more flexibility in designing tip pools that better reflect the contributions of both service and non-service staff members.

Restrictions & Considerations for Employers

Minimum Wage:  Maine’s new tip-pooling law allows employers to select from the following two options in creating a tip-pool arrangement:

1. 1. Non-Service Employees, No Tip Credit. If the employer wishes to include non‑service employees in a tip pool, the employer cannot use the tip credit, and all participating employees must be paid the full minimum wage (currently $15.00 per hour in Portland).

1. 1. Service Employees Only, Tip Credit. If the tip pool consists of only service employees, the employer may use the tip credit and count an employee’s earned tips towards a portion of the minimum hourly wage (currently up to $7.50 per hour in Portland).

Employers will therefore need to decide whether the employer wants to (1) include non‑service employees in the tip pool, or (2) utilize the tip credit towards a portion of the employee’s minimum hourly wage. Supervisor Exclusion: Regardless of whether a tip-pooling arrangement includes non‑service employees, supervisors and managers cannot participate in the tip pool. Legal Compliance: Maine’s new tip-pooling law, although beneficial in many ways, makes complying with federal and state law more challenging.  Employers should therefore work with an attorney to ensure their tip-pooling arrangement adheres to both federal and Maine law. Clear Communication: Employers should develop a written tip-pooling policy that outlines how the pool is calculated and distributed. Transparency is key for building trust with staff. By implementing a compliant and well-structured tip-pooling system under the Maine’s new law, hospitality businesses can create a more rewarding work environment for all staff while improving overall business operations.  Attorneys in Perkins Thompson’s Employment, Hospitality and Business & Corporate practices are here to advise and assist your business in creating a tip-pooling arrangement and policy that meets your business’s needs.