Tipping regulations can be confusing, so the Minnesota Department of Labor and Industry (DLI) is here to help ease the confusion.

We have created information and resources to help employers and workers understand their workplace rights and responsibilities when it comes to tipping laws. Let's review these laws.

In Minnesota, employers are prohibited from taking a tip credit against the minimum wage. This means tips cannot be applied to an employee's wages to get up to the minimum wage owed per hour. In other words, tips do not count toward the payment of minimum wage.

Tips are the property of the direct service employee. Employers cannot require employees to share their tips with other employees.

When is tip sharing legal?

Tip sharing is legal when employees decide for themselves to share their tips with other employees. Employers cannot participate in that decision or coerce employees to share tips.

Employers cannot have any involvement in tip sharing, other than:

• reporting the amounts received for tax purposes;
• posting a copy of the law about tip sharing for employee information; and
• safeguarding and distributing tips to employees participating in an employee-initiated tip agreement, if requested by the employees.

For example, employers that require wait staff to contribute a percentage of their tips to the back-of-the-house staff or employers that base scheduling decisions on whether an employee contributes their tips or not may be in violation of the law. Similarly, employers that suggest servers contribute tips to back-of-the-house workers, for example to foster team camaraderie, may also be in violation of the law.

When is employer-required tip pooling legal?

An employer may pool tips in situations such as banquets where more than one employee is serving the same customer, guest or patron. If an employer chooses to pool tips in these situations, the tips can only be shared among the direct service employees working on the same shift. A "shift" means a period of time in which a particular group of employees work together to provide direct service to customers.

Learn more

Learn more about tipping laws and find a printable fact sheet at dli.mn.gov/tips.

Coming events

• Small businesses can interact with government representatives and learn about their services on Thursday, Jan. 26, in Bloomington. Learn more and register at bit.ly/3QzCTv6.
• The Labor Standards unit will provide a Tuesday, Feb. 28, webinar that will cover wage and hour information about wage and hour basics. Learn more at dli.mn.gov/events.