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.

• For credit card tips only, employers may keep a percentage of the tip that is the same amount deducted by a credit card service company.

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.