Well the reason for not allowing management to be tipped is obvious 'cause they have the power to schedule people and could thus schedule themselves into a better slot.
Whenever you have tipped positions, the employees quickly figure out which shifts tend to tip better, and they jocky for those positions.
This is problematic, as in my example with the overnight shift. No one wants to work a shift where tipping is slim to nil. Thus if you don’t schedule to split up prime tip shifts, people will not earn enough and quit. Of course the employees use the “I’ve been here longer I should get my choice of shifts.” Fair enough but by hoggin’ all the good tip shifts, it helps that ONE employee at the expense of the company as a hole.
For the other rule “no tipping to employees” part of it can extend to the fact, employers have a responsibility to account for tips in payroll.
The rules vary from state to state, but in Illinois for example if it is “reasonable” to think an employee is getting tips, you need to set up a system for that employee to report them to the employer. Also you need to report and withhold taxes.
There’s a whole slew that goes with it.
I’ve been in hotels almost my whole life and I’ve worked as an asst controller my last two jobs and I’ve never seen anyone get in trouble, even for blantantly violating tip rules. Of course that doesn’t mean it doesn’t happen, I am absolutely sure it does. But if I can be in a business for 25 years and never once come across it, then it means your chance of being caught are not very high.
Again I’m not saying it does’t happen where the IRS catches people. They certainly do, but the catch rate must be low.
Another reason companies may say “don’t tip,” again as it encourages in fighting among staff. They all want the tip.
I was a Revenue Manger for a one of the highest class hotels in Chicago. We had a guest, Mr Quinn, who was very wealthy and the LEAST he’d tip was $20.00. Usually it was a lot higher. Carry 2 bags of Mr Quinn’s up to his room could often result in a $50 or $100 tip. Just for carrying the bags. He threw money around and EVERYONE jumped at him to get it.
Now Mr Quinn would stay with us about 180 days a year and he always paid, whatever rate, he didn’t care. So if I was watching the front desk or was manager on duty and I saw even the slightest hint of fighting over him to get a tip, I’d do the job myself and take the tip and give it to the front office manger, to split up for when they had their “Pizza parties or whatever.” I was not gonna have this guy insulted over a couple of bellman fighting to see who gets a tip. Though I certainly can understand them doing such.
OK, now that’s an extreme example but it does show how people will jockey to get tips and how it causes in-fighting.