If your employer's restaurant is governed by the federal Fair Labor Standards Act (FLSA), I don't think this tipout procedure is legal. If the restaurant has an annual business volume greater than $500,000, it should be covered by the FLSA. http://www.dol.gov/compliance/guide/minwage.htm The U.S. Department of Labor has a great fact sheet for tipped employees. The PDF is available here: http://www.dol.gov/esa/regs/compliance/whd/whdfs15.pdf Tip pooling is allowed, but ONLY among employees who "customarily and regularly receive tips." The fact sheet specifically says that employees like "dishwashers," "cooks," and "chefs" cannot share in a tip pool. Regarding the part-owner of the restaurant, that seems illegal to me. The fact sheet also says that no part of an employee's tips can become property of the employer. Credit card fees are a bit complicated. Employers can reduce tips to offset these fees. But the employer can ONLY reduce the tip for the ACTUAL credit card fee for processing the tips. Since some tips are paid in cash, taking 2% off the top does not seem legit. If you need legal advice on this matter, feel free to contact me.

Unless you're working under the protection of a contract of employement which would forbid this practice, I would conclude that indeed "he" can in the employment at will jurisdiction known as the Commonwealth of Virginia.