Tips, tip credit

Minnesota employers are prohibited from taking a tip credit against the minimum wage

• Employers may not count tips received by an employee toward the payment of minimum wage.

• Employees must receive the applicable minimum wage in addition to any tips they may receive.

Employers are prohibited from directing employees to pool or share tips

• No employer may require an employee to share a tip with the employer or other employees or to contribute to any tip pool, except as listed below.

• When more than one direct service employee provides direct service to a customer in a given situation such as banquets, money presented by customers as a gratuity and divided among the direct service employees is not a violation of Minnesota tip laws.

• Dividing money left in a tip jar, or the equivalent of a tip jar, among direct service employees working on the same shift is not a violation of Minnesota tip laws and related case law. A “shift” means a period of time in which a particular group of employees work together to provide direct service to customers.

Employers may take the following actions regarding tips

• Upon the request of employees, an employer may store tips to be shared by employees and disburse shared tips to employees who agree.

• An employer may report amounts received as tips for tax purposes.

Tips made by credit card or e-payment

• Starting Aug. 1, 2024, employees must receive the full amount of tips paid by card or e-payment. Before this date, employers could deduct the swipe fee for these payments from tips. Now, employers must give the full tip amount to workers. Gratuities received through credit cards or other types of electronic payments must be paid to the employee in the next pay period.

Download a printable fact sheet about tip laws.

It is your right to get paid correctly. Free help for filing a wage claim.
For free help filing a wage claim, contact us at dli.laborstandards@state.mn.us or 651-284-5075.