Minnesota Tip Pooling Laws Explained
Minnesota is the strictest tip-pooling state in the country: not only is there no tip credit, but employers can't require tip pooling at all. Sharing happens only if employees choose it. Here's how that works in practice.
Most state guides in this series explain how to run a mandatory tip pool legally. Minnesota is the exception: under Minn. Stat. § 177.24, an employer cannot require an employee to share tips — not with a pool, not with support staff, not with anyone.
Tips are the employee's — full stop
In Minnesota, tips belong to the direct-service employee who received them. Employers may not take any portion, may not count tips toward the minimum wage (there is no tip credit), and may not make pooling or tip-outs a condition of employment. Card tips must be paid in full — Minnesota law treats the full amount the customer wrote as the employee's.
Voluntary sharing is allowed
Minnesota employees may voluntarily agree among themselves to pool or share tips. The employer's role is limited: it may inform staff that sharing is permitted and may administer an arrangement employees ask for — but it cannot mandate, coerce, or set the terms, and participation can't affect anyone's hours or treatment.
In practice, many Minnesota restaurants run employee-initiated pools that management merely bookkeeps. Document that the arrangement is voluntary — a signed, employee-initiated agreement that any participant can leave — and keep the employer's fingerprints off the formula.
Wages, service charges, and cities
- Every employee earns the full Minnesota minimum wage before tips; the rate adjusts for inflation each January, and Minneapolis and St. Paul set higher city minimums.
- Mandatory service charges aren't tips — but if a patron would reasonably believe a charge is for the staff, Minnesota requires clear notice when the house keeps it.
- Because pooling is voluntary, keep records showing who agreed, when, and to what formula.
Minnesota compliance checklist
- Never require tip sharing, pooling, or tip-outs — or tie them to scheduling or discipline.
- Pay the full state (or higher city) minimum wage in cash; no tip credit exists.
- Pass card tips through in full.
- Put any voluntary arrangement in writing, initiated and signed by the employees.
- Apply the employees' chosen formula exactly, and log every distribution.
When the pool is the employees' own agreement, transparency is everything — everyone needs to see that the split matches what they signed. Divvy applies the chosen formula identically every shift and gives each person a full breakdown. Start with the federal guide, or compare the other no-tip-credit states like Oregon and Washington.
Frequently asked questions
Can a Minnesota employer require tip pooling?
Does Minnesota allow a tip credit?
Can Minnesota employees still share tips with bussers or the kitchen?
Can Minnesota employers deduct card fees from tips?
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.