So at the restaurant I work at they require us to tip out 3% of our gross sales plus 3 dollars per shift for silverware. The tip out is automatically taken out of the money we owe at the the end of the night and not given directly to the people we are tipping out (expo, food runners, bussers, hostesses, and bar tenders). All of the previously mentioned employees and servers are paid 3.65 per hour, and on pay day they receive an envelope with their tip out for the previous 2 weeks. The silverware roller is paid nightly the cash that we give and does not clock in. Clearly that aspect of the situation is illegal, but my question is if the rest is illegal. Is it legal to only pay expo, food runners, bussers and hostesses only 3.65 an hour and to make the servers pay the rest of their money to get them up to minimum wage? Also is it legal for the restaurant to take the money themselves and divide it amongst the employees? I am pretty sure from talking to some of the tipped out employees that part of the tip share is disappearing and not going to the employees as it is supposed to. The bartenders are supposed to get 10% of the tip share. A bartender I was talking to only received 53 dollars in tip share for 2 weeks (6 shifts, 4 of which were a Friday or Saturday) Based on the bartenders tip share being 10% of the total, and the total being 3% of the gross sales, the sales for the shifts she worked would have to have only been $2,944. On a slow week this restaurant does about 55,000 net sales. Clearly all the tips are not being distributed how they should be. I have no problem tipping out, and I think 3% is relatively fair, but I think illegal things are going on and the mangers are pocketing money. What aspects, if any are illegal, and who would be the appropriate entity to file a complaint with. Thanks in advance for your help.

I am going to include a pointer to the federal tips fact sheet. While I am going to cite parts of the fact sheet, you really need to read the entire fact sheet.
http://www.dol.gov/esa/whd/regs/compliance/whdfs15.htm

Retention of Tips: The law forbids any arrangement between the employer and the tipped employee whereby any part of the tip received becomes the property of the employer. A tip is the sole property of the tipped employee. Where an employer does not strictly observe the tip credit provisions of the Act, no tip credit may be claimed and the employees are entitled to receive the full cash minimum wage, in addition to retaining tips they may\should have received.

Tip Pooling: The requirement that an employee must retain all tips does not preclude a valid tip pooling or sharing arrangement among employees who customarily and regularly receive tips, such as waiters, waitresses, bellhops, counter personnel (who serve customers), busboys/girls and service bartenders. Tipped employees may not be required to share their tips with employees who have not customarily and regularly participated in tip pooling arrangements, such as dishwashers, cooks, chefs, and janitors. Only those tips that are in excess of tips used for the tip credit may be taken for a pool. Tipped employees cannot be required to contribute a greater percentage of their tips than is customary and reasonable.

So does that mean that they are not allowed to hold the tips for the share then redistribute them? Also, this wouldn't be considered tip pooling would it?

I think that you have some arguments based on the rules. The rules I cited are federal law, meaning valid everywhere in the country. I think that "mangers are pocketing money" is probably illegal. A "manager" could at least in theory also being doing substantial work that would qualify them to be part of a tip pool. Or not. There is a real need to look at all facts together and not just pick out one or two and try real hard to ignore everything else. The government tends to look at the whole picture, something annoys the heck out of both employers and employees, who often would rather pick one key phrase out of the regulations and restrict all discussion to that one phrase.

Past that, some of the other things you mentioned may or may not be illegal based on how you worded things. I would look to see if MW/OT rules are being followed, based on wages actually paid and tips actually received. I agree that 3% tip out is probably reasonable, but that who is getting the tips might not be.

Having managers "hold the tips for the share then redistribute them" is not a problem because the rules do not say it is a problem. The rules are not very clear on how the mechanics of the tip pool are supposed to work. You seem to be saying that because a manager "held" the tip that somehow the tip pool is invalid. If that is what you meant, then I am not seeing where you are getting that from.

To whom the tips are distributed could be a problem. Not paying MW/OT on a workweek basis would be a problem. Having the tips magically distribute themselves without being touched by an actual manager does not seem to be an actual legal requirement.

You need to be very careful to stick with what the fact sheet actually says, and looking for violations based on not following the rules based on the fact sheet. I am going to suggest that trying to rephrase the tip sheet rules into something that the tip sheet does not actual say is not really helpful.