Vermont tip pooling laws & tipped minimum wage
In Vermont, employers can pay tipped workers $7.21/hr as long as tips bring them to the $14.42 minimum — here's how that works and who can legally share your tips.
| Regular minimum wage | $14.42/hr |
| Minimum cash wage for tipped workers | $7.21/hr |
| Maximum tip credit | $7.21/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 Vermont labor department. Not legal advice.
What's specific to Vermont
Vermont’s tipped rate (half the minimum) applies to hotel, motel, tourist place, and restaurant workers who customarily receive tips.
Vermont’s tipped rate is half the minimum — and only for certain industries
Vermont’s minimum wage is adjusted for inflation each January. As of January 1, 2026 it is $14.42 an hour, and the tipped cash wage is set at half that, or $7.21, with your tips required to bring you up to the full $14.42.
The half-rate is not open to every tipped job. Under Vermont law it applies only to a service or tipped employee — a worker in a hotel, motel, tourist place, or restaurant who customarily and regularly receives more than $120 a month in tips for direct customer service. Outside those industries, the full minimum wage applies.
Weekly tip reports, and the shortfall stays with your employer
Vermont requires a service employee to give the employer a signed weekly report of tips received, and the employer must keep those reports. This paper trail is how the state checks that tips actually brought you to the minimum wage.
If in any workweek your $7.21 cash wage plus tips do not reach $14.42 an hour, your employer must pay the difference. Because the figures change every January, confirm the current rate with the Vermont Department of Labor at the start of each year.
Tip pooling in Vermont
Vermont follows the federal baseline: employers may require tip pooling. If your employer takes the tip credit (pays $7.21/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 Vermont 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.
Vermont tip law FAQs
What is the tipped minimum wage in Vermont?
Employers in Vermont may pay tipped employees a cash wage of $7.21/hr and claim a tip credit of up to $7.21/hr toward the $14.42 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 Vermont?
Vermont follows the federal baseline: employers may require tip pooling. If your employer takes the tip credit (pays $7.21/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 Vermont?
No. Federal law prohibits managers, supervisors, and owners from keeping any portion of employee tips in every state, including Vermont. A manager may keep only tips they directly and solely earned (e.g., a table they personally served start to finish).
Who qualifies for Vermont’s tipped wage?
Only a service or tipped employee — someone working in a hotel, motel, tourist place, or restaurant who customarily receives more than $120 a month in tips. Tipped workers outside those industries must be paid the full minimum wage.
Does Vermont’s tipped wage change each year?
Yes. The minimum wage is adjusted for inflation every January 1, and the tipped cash wage is half of it. For 2026 the minimum is $14.42 and the tipped cash wage is $7.21.