No, managers in Minnesota cannot take tips. Under state law every gratuity belongs solely to the employee who earned it, and no employer, owner, supervisor, or manager may keep any portion of it or force workers to hand tips over to management. The rule applies whether the tip is cash on a table, a line on a credit card slip, or money in a tip jar.
The statute behind this is Minnesota Statutes Section 177.24, subdivision 3, which treats any gratuity received by an employee, or left at a place of business for personal services, as the sole property of that employee.1Minnesota Office of the Revisor of Statutes. Minnesota Code Chapter 177 – Section 177.24 An employer cannot require a worker to turn tips over, feed them into a management fund, or route them to a pool that benefits the business or its supervisors.
What an Employer Is Allowed to Do With Tips
The employer’s lawful role is narrow. The Minnesota Department of Labor and Industry describes three permitted activities and nothing else: holding tips that employees have voluntarily agreed to share and paying them out, reporting tip amounts for tax purposes, and posting a copy of the tip law where employees can read it.2MN.gov. Tip Credit, Tip Sharing, Tip Pooling
Everything outside those tasks is a violation. That includes taking a percentage off the top, deducting tips to cover walkouts or broken glassware, routing a cut to supervisors, or quietly adding management to a tip pool. One point worth noting on the wage side: Minnesota does not allow a tip credit, so an employer cannot pay a reduced base wage and count gratuities toward the minimum.3Minnesota Department of Labor and Industry. Tips, Tip Credit Tips are entirely separate from wages, which removes any argument that a manager is “balancing” labor costs by dipping into them.
Who Actually Counts as a Manager
Whether a person is a manager for this purpose turns on what they do, not what their title says. Minnesota Statutes Section 177.23, subdivision 7, excludes individuals employed in a “bona fide executive, administrative, or professional capacity” from the statutory definition of “employee” for wage and hour protections.4Minnesota Office of the Revisor of Statutes. Minnesota Code Chapter 177 – Section 177.23 Under the federal standards Minnesota generally follows for the executive test, a true executive’s primary duty is management, they regularly direct the work of at least two other employees, and they have meaningful authority over hiring and firing.
That matters in two directions. A bona fide executive cannot share in employee tips at all. But a “manager” or “shift lead” whose actual day consists of taking orders, running food, or tending bar may not meet the executive threshold, in which case they are treated as a regular employee for wage purposes.
Minnesota rules also distinguish between direct and indirect service employees. A direct service employee is one who personally performs direct service for a customer in a given situation; coworkers who assist, such as bussers, dishwashers, cooks, and hosts, are indirect service employees.5Minnesota Office of the Revisor of Statutes. Minnesota Rules 5200.0080 Only direct service employees are eligible to receive and share tips under Minnesota’s framework.
Tip Pools and Sharing
Employees may share tips with one another, but only on their own initiative. The law prohibits employers from mandating a tip pool or dictating how gratuities get divided.3Minnesota Department of Labor and Industry. Tips, Tip Credit Any sharing arrangement has to come from the workers themselves, free of employer pressure. A manager or supervisor cannot sit inside the pool, even if they occasionally pitch in on service tasks.
The Department of Labor and Industry recognizes a few situations where splitting tips among direct service employees is lawful:2MN.gov. Tip Credit, Tip Sharing, Tip Pooling
- Banquets or group service, where several direct service employees serve the same customer or party and the gratuity is divided among them.
- Tip jars, where money left by customers can be split among direct service employees who worked the same shift.
- Employer-held tips, where workers themselves ask the employer to safeguard shared tips and distribute them later.
In none of these does a manager, supervisor, or indirect service employee get a share. The common thread is that only the direct service workers who actually served the customers are included.
What to Do If a Manager Is Taking Tips
If a manager has been keeping your tips, taking a cut, or forcing you into a pool that benefits management, you can file a wage claim with the Minnesota Department of Labor and Industry. You can reach the Labor Standards Division online, by email at dli.laborstandards@state.mn.us, or by phone at 651-284-5075 (toll-free 800-342-5354).6Minnesota Department of Labor and Industry. Wage Theft
Gather this information before you file:7Minnesota Department of Labor and Industry. Wage Claim
- The employer’s name, address, phone, email, and the name of the manager or owner.
- Your pay rate or rates.
- The dates you worked that were not properly paid.
- The amounts and dates of any unlawful deductions or diverted tips.
- Your last day of work, if you no longer work there.
- The date you demanded final wages, though you are not required to make a demand before filing.
Keep your own records too. A daily log of hours, shifts, and estimated tips, along with photos of schedules or screenshots of pay statements, will strengthen the claim. An investigator takes the matter from there. Claims typically close in about 21 days, though complex cases can run longer, and you receive a letter with the outcome and information about further legal options when the investigation ends.7Minnesota Department of Labor and Industry. Wage Claim
What the Employer Owes if You Win
Under Minnesota Statutes Section 177.27, the commissioner of the Department of Labor and Industry can order the employer to repay the full amount of diverted tips plus an equal amount in liquidated damages, which doubles what is owed.8Minnesota Office of the Revisor of Statutes. Minnesota Statutes 177.27 If the employer’s records do not show how much was taken, the commissioner can estimate the amount based on the evidence available.
The same double-damages rule carries into a private lawsuit, and federal law adds reasonable attorney’s fees and court costs for a prevailing employee in wage and hour cases.9Office of the Law Revision Counsel. 29 U.S. Code 216 – Penalties Minnesota also treats intentional wage theft, which includes tip theft, as a criminal matter. Depending on the amount stolen, charges can rise to a felony punishable by up to 20 years in prison and fines up to $100,000. The commissioner may also fine an employer up to $10,000 for each failure to produce payroll and tipping records during an investigation.8Minnesota Office of the Revisor of Statutes. Minnesota Statutes 177.27
Your Employer Cannot Punish You for Reporting
Minnesota Statutes Section 181.932 bars an employer from firing, disciplining, threatening, or otherwise retaliating against a worker who reports a suspected violation of state or federal law, whether the report goes to the employer or to a government agency.10Minnesota Office of the Revisor of Statutes. Minnesota Statutes 181.932 Filing a wage claim with the DLI, contacting the attorney general’s office, or raising the issue directly with the manager are all covered.
Federal law adds another layer. Section 15(a)(3) of the Fair Labor Standards Act prohibits an employer from discharging or discriminating against a worker who files a wage complaint, participates in an investigation, or testifies in a proceeding.11U.S. Department of Labor. Fact Sheet 77A: Prohibiting Retaliation Under the Fair Labor Standards Act (FLSA) If retaliation happens, you can file a complaint with the federal Wage and Hour Division or sue for reinstatement, lost wages, and liquidated damages equal to the lost wages. The protection applies as long as your complaint was made in good faith, even if it does not ultimately prove out, and it covers oral complaints as well as written ones.