Tip Pooling Laws by State: All 50 States at a Glance

Tip pooling is legal in every state, but whether your state allows a tip credit — and how strict its rules are — changes what a compliant pool looks like. Find your state below.

Federal law sets the floor for tip pooling everywhere: managers and owners can never share in a pool, and if an employer takes a tip credit (counting tips toward the minimum wage), a mandatory pool is limited to employees who customarily receive tips. States build on that baseline — and the single biggest state-level difference is whether a tip credit is allowed at all. Start with the complete federal guide, then check your state below.

The no-tip-credit states

Seven states require employers to pay the full state minimum wage before tips: Alaska, California, Minnesota, Montana, Nevada, Oregon, and Washington. Because no tip credit is taken in these states, tip pools can generally include back-of-house staff like cooks and dishwashers — though managers and owners are always excluded. Washington, D.C. still allows a tip credit; the Initiative 82 phase-out was scaled back by the D.C. Council in 2025.

All 50 states (and D.C.) at a glance

"Tip credit: Yes" means state law allows employers to pay tipped staff a lower cash wage and count tips toward the minimum — which also means a mandatory pool is limited to customarily-tipped roles. Cash-wage figures are the state baselines and change often; cities may set stricter rules. Always verify current numbers with your state labor agency.

What to do with this information

• No-tip-credit state? You have more flexibility on who can share — but state rules (especially California's) are often stricter in other ways.
• Tip-credit state? Keep mandatory pools to front-of-house tipped roles, or pay full minimum wage and skip the credit to include the kitchen.
• Everywhere: exclude managers and owners, write your formula down, and keep a record of every split.

Divvy applies your written pool rules to every check automatically and keeps a per-payout audit trail, whatever state you operate in. For the deep dives, see California, New York, Texas, Florida, Illinois, Pennsylvania, Ohio, Michigan, New Jersey, Connecticut, Massachusetts, Virginia, North Carolina, Georgia, Tennessee, Arizona, Colorado, Washington, Oregon, Minnesota, Nevada, Alaska, and Montana.

This guide is general information, not legal advice. Tip laws change and vary by state and city. Verify current rules with the U.S. Department of Labor, your state labor agency, and a qualified employment attorney before setting your tip policy.