29 C.F.R. § 531.55 : Labor — REGULATIONS RELATING TO LABOR — WAGE AND HOUR DIVISION, DEPARTMENT OF LABOR — REGULATIONS — WAGE PAYMENTS UNDER THE FAIR LABOR STANDARDS ACT OF 1938 — TIPPED EMPLOYEES — Examples of amounts not received as tips

(a) A compulsory charge for service, such as 15 percent of the amount of the bill, imposed on a customer by an employer's establishment, is not a tip and, even if distributed by the employer to its employees, cannot be counted as a tip received in applying the provisions of sections 3(m)(2)(A) and 3(t). Similarly, where negotiations between a hotel and a customer for banquet facilities include amounts for distribution to employees of the hotel, the amounts so distributed are not counted as tips received.
(b) As stated above, service charges and other similar sums which become part of the employer's gross receipts are not tips for the purposes of the Act. Where such sums are distributed by the employer to its employees, however, they may be used in their entirety to satisfy the monetary requirements of the Act.

29 C.F.R. §531.55

76 FR 18856, 4/5/2011; 85 FR 86790, 3/1/2021