Kentucky tip pooling laws & tipped minimum wage
In Kentucky, employers can pay tipped workers $2.13/hr as long as tips bring them to the $7.25 minimum — here's how that works and who can legally share your tips.
| Regular minimum wage | $7.25/hr |
| Minimum cash wage for tipped workers | $2.13/hr |
| Maximum tip credit | $5.12/hr |
| Tips belong to | Employees — always |
A tip credit lets an employer count your tips toward the minimum wage it owes you. Rates reviewed July 2026. Rates change — confirm with the Kentucky labor department. Not legal advice.
Kentucky ties its tipped wage to the federal rate
Kentucky sets its minimum wage at the federal $7.25 an hour. Under KRS Chapter 337, the state’s tipped minimum wage is expressly tied to the federal Fair Labor Standards Act, so an employer may pay a cash wage of $2.13 and take a tip credit of up to $5.12, as long as your tips bring the total to at least $7.25 an hour.
Kentucky cities cannot set their own minimum wage
Louisville and Lexington both passed local minimum-wage ordinances that would have raised pay above $7.25. In 2016 the Kentucky Supreme Court struck them down, ruling that cities and counties have no authority to set a minimum wage higher than the state’s.
Because of that decision, there are no enforceable local wage floors in Kentucky. The $2.13 tipped cash wage and the $7.25 minimum apply the same way across the entire state.
If your tips fall short, your employer owes the difference
The tip credit does not let an employer pay you below minimum wage. In any workweek where your $2.13 cash wage plus tips do not average at least $7.25 an hour, your employer must make up the difference in that paycheck. If it does not, you can file a wage claim with the Kentucky Labor Cabinet.
Tip pooling in Kentucky
Kentucky follows the federal baseline: employers may require tip pooling. If your employer takes the tip credit (pays $2.13/hr cash), the pool may only include customarily tipped workers — servers, bussers, bartenders, runners, hosts. Back-of-house can only be included if everyone is paid full minimum wage with no tip credit. Managers and supervisors are always excluded.
One federal rule applies everywhere: managers and supervisors can never take from a tip pool. Separately, credit card processing fees may only be deducted from tips where state law allows it.
What this means for your tip-out
Because part of your legal wage in Kentucky comes from tips, the employer's tip credit assumes those tips reached you. Use the tip-out calculator to split a shift by your house's percentages or by hours, and see standard tip-out percentages to check whether your house's rates are typical.
Kentucky tip law FAQs
What is the tipped minimum wage in Kentucky?
Employers in Kentucky may pay tipped employees a cash wage of $2.13/hr and claim a tip credit of up to $5.12/hr toward the $7.25 minimum wage. If tips don't close the gap in a workweek, the employer must make up the difference.
Is mandatory tip pooling legal in Kentucky?
Kentucky follows the federal baseline: employers may require tip pooling. If your employer takes the tip credit (pays $2.13/hr cash), the pool may only include customarily tipped workers — servers, bussers, bartenders, runners, hosts. Back-of-house can only be included if everyone is paid full minimum wage with no tip credit. Managers and supervisors are always excluded.
Can my manager take a share of the tip pool in Kentucky?
No. Federal law prohibits managers, supervisors, and owners from keeping any portion of employee tips in every state, including Kentucky. A manager may keep only tips they directly and solely earned (e.g., a table they personally served start to finish).
Did Louisville or Lexington ever have a higher minimum wage?
Both cities passed local minimum-wage ordinances, but the Kentucky Supreme Court struck them down in 2016, holding that cities lack authority to set wages above the state floor. Those local increases are no longer in effect.
Can a Kentucky city set a higher tipped minimum wage now?
No. After the 2016 ruling, no Kentucky city or county can require employers to pay above the state minimum, so the tipped cash wage stays $2.13 statewide.