Tips, Tip Credits, Tip Pooling, and More

Although tips belong to employees, your employer can pay you a lower minimum wage if you receive tips.

What Are My Rights to Tips?

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Do you earn tips as part of your wages? If so, you should know the rules about what counts as a tip, how much your employer must pay you in addition to your tips, and whether and how much you can be required to contribute to a tip sharing arrangement (also called a “tip pool”).

Legally, tips belong to the employee. An employer can never take employee tips and keep them for itself. However, an employer may be allowed to take a “tip credit” – to count part of the tips an employee earns towards the employer’s obligation to pay the minimum wage. Employers may also be allowed to require employees to share their tips with each other and to pass on certain costs – such as credit card processing fees – to employees by docking their tips. To find out the rules in your state, select it from the list below. 


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