Employment Law Update and Tip Pools

It feels like I just finished writing the last article and here I am at it again. Vaccines have been flying off the shelves around Montana, but the rate of vaccinations are slowing down tremendously. The number of new Covid cases are on a steep decline around the country and the CDC has issued its new guidance for wearing masks for those that are fully vaccinated. 


All of the economic prognosticators are saying that businesses need to be prepared for a busy summer tourist season, as Americans’ pent up demand for travel is at an all-time high! We in Montana are already feeling the effects of the pent up demand. Simply try to find a newer vehicle, RV or a boat? Most of the sales lots are empty. Many of our clients in the tourism industry are reporting record bookings, and we haven’t even started the real tourism season. Luckily, the weather is finally cooperating as I write this, which tells me that I need to hurry up and get this article done so I can get out on the water today with one of our great small-town bar owners.


The legislative session has just finished for 2021 and some pretty sweeping legislation has passed the governor’s pen! One of the major employment law issues that got resolved is tip pools. Thank heavens! 

We have had many clients raise the issue of tip pools over the many years. In the past, the employer could not mandate the tip pools. Any tip pooling had to be at the voluntary direction of the employees. This caused a lot of concern when employers included tip pooling in their handbooks. We have defended many cases before the Department of Labor and Industry that dealt with tip pools, under the old law, and the recurring problem arose when the employee claimed that the employer either made the tip pooling mandatory or the employee was facing some sort of retribution from the employer for not agreeing to go along with the other employees and participate in the tip pooling. We have seen a lot of crazy things come out of the Department of Labor decisions regarding tip pooling cases. The good news is, the old way is in our rearview mirror, so let’s talk about the new tip pooling law, Senate Bill 190.

First and foremost, the new law allows for employer mandated tip pools. The employer must; 1. Notify all employees and the employer, salaried supervisors or salaried managers cannot participate in the tip pool. Additionally, the employer can control the tips, for distribution and facilitation purposes (if the employer is controlling the tips, then the tips have to be distributed by the payday for that work week). The tip pooling may include servers, hosts, bussers, dishwasher, cooks, or other employees, and does not impose a minimum or a maximum contribution percentage on mandatory tip pools. The new law goes into effect upon signing from Governor Gianforte, which was May 3, 2021. 

If you are going to do a tip pool, then please, put it in writing for your employees, and make sure they sign, acknowledging that they have been informed of the tip pool. Do not hesitate to give us a call if you have any questions.

On another note, we have a new law allowing for the concealment and carry of firearms. If you don’t want concealed firearms in your business, then you must post a written statement on your front door, notifying individuals that you do not allow concealed carry of firearms on your premises.

We will continue to try and bring any new legal changes to you as we continue to decipher some of Montana’s new laws.

If you are facing an employment law issue and need legal guidance, contact an employment attorney like the professionals at Silverman Law Office, PLLC.


Information is power. Help win your own case!