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Tip pooling laws by state (2026)
Federal law sets the floor, and many states add stricter rules. The biggest question is whether your state lets you take a tip credit, because that decides who can be in a mandatory pool.
The one question that decides who's in your pool
You pay tipped staff below full minimum wage
- Servers, bartenders, bussers, runners, hosts
- Cooks, dishwashers, other back-of-house
- Managers and supervisors
- Cash wage + tips must reach minimum wage
You pay everyone the full minimum wage
- Servers, bartenders, bussers, runners, hosts
- Cooks, dishwashers, other back-of-house
- Managers and supervisors
- Pool still must be distributed in full
States that ban the tip credit
In these seven states, tipped employees must get the full state minimum wage in cash before tips. Since there's no tip credit, federal rules allow a mandatory pool to include back-of-house staff.
State law can still limit who shares. Minnesota, for example, doesn't allow mandatory sharing at all (see below).
Rules worth knowing
Minnesota State
Tip sharing generally must be voluntary. Employers can't require employees to share tips or join a pool.
Massachusetts State
Pools are limited to wait staff, service bartenders and service employees. Managers are excluded.
Washington, D.C. District
Initiative 82 is raising the tipped wage over time. As of July 2026 the tipped cash wage is $10/hr.
Chicago City
Phasing out the tip credit. Full minimum wage for tipped workers is required by July 1, 2030.
Everywhere else
A tip credit is allowed, but the amount varies by state. If you take one, keep cooks, dishwashers and managers out of the pool, and make sure each tipped employee's cash wage plus tips reaches the minimum wage for every hour worked.
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Keep reading
General information about U.S. federal law (FLSA, 29 U.S.C. §203(m)) and selected state and city rules as of October 2026. Not legal advice. Check your state labor department or an employment attorney before changing your pay practices.