{3:00 minutes to read} It is critical that restaurants make sure that owners (or managers with significant supervisory authority) do not participate in tip pooling and tip sharing arrangements. There have been significant penalties assessed against establishments that have run afoul of this rule. An East Coast restaurant chain was fined by the Department of Labor for employers illegally retained a portion of employee tips and for failing to properly pay minimum wage, overtime, and other required income. They paid a settlement of $6.8 million to over 1,100 employees.