Montana tip laws (2026)
Montana bans the tip credit. Tipped workers get the full $10.85 an hour in 2026, rising to $11.20 on January 1, 2027, and tips land on top. Employers can require tip pools that include cooks and dishwashers, but employers and exempt salaried managers stay out.
Montana at a glance
No tip creditMontana: $10.85 an hour minimum wage and no tip credit, so tipped staff get the full $10.85 before tips.
| State minimum wage | $10.85/hr | Statewide from .[1] |
|---|---|---|
| Tipped cash wage | $10.85 | Full minimum wage. Tips go on top.[2] |
| Max tip credit | None | Tips can't count toward wages.[2] |
| Tip pooling | Allowed | Mandatory pools allowed.[3] |
| Card-fee deduction | Pro rata only | Only the tip's share of the fee.[4] |
| Card tip payout | Employer-collected pool tips must be fully distributed no later than regular payday for the collection workweek.[3] | |
| Local minimum wages | None | State law blocks local rates.[5] |
Rates verified against the Montana Department of Labor and Industry, Employment Standards Division on . Rates as of . Tipped totals are worked out from the rates above. Download this data (CSV)
02The yes/no sheet
Can you do this in Montana?
In Montana you can't take a tip credit, can require staff to join a tip pool and can take out only the tip's share of a card fee. Each answer below carries its condition and an official source.
| Number | Can you… | Answer | The condition |
|---|---|---|---|
| 01 | Take a tip credit against minimum wage? | No | Pay the full $10.85 an hour before tips.[2] |
| 02 | Make staff join a tip pool? | Yes | Allowed, as long as only eligible staff share.[3] |
| 03 | Include bartenders, bussers, runners and hosts? | Yes | All four can share.[3] |
| 04 | Include cooks and dishwashers? | Yes | Cooks, dishwashers and other food-preparation/customer-service employees may participate; employers and disqualified managers may not.[3] |
| 05 | Give managers or supervisors a share? | No | Exempt salaried managers and supervisors can't join pools. Federally covered employers also exclude anyone meeting the federal manager duties test.[3][7] |
| 06 | Let an owner keep any of the tips? | No | Employers cannot participate in the pool; directly received tips for their own service are treated separately.[3] |
| 07 | Pick your own split (hours, points or percentages)? | Depends | A required contribution cannot exceed the employee’s tips; there is no minimum or maximum contribution percentage.[3] |
| 08 | Take card processing fees out of tips? | Pro rata | Employers may take only the card company's percentage from charged tips or service charges, and must keep a record of each deduction.[4] |
| 09 | Hold card tips until payday? | Deadline | Employer-collected pool tips must be fully distributed no later than regular payday for the collection workweek.[3] |
| 10 | Cover walkouts, breakage or register shortages from tips? | No | Not from tips.[8][7][4][3] |
| 11 | Keep a mandatory service charge for the house? | Depends | A fixed charge added instead of a tip goes to nonmanagement food, beverage or related-service staff under a tip pool agreement.[9] |
| 12 | Pay tips on a payroll card? | Depends | With the worker's consent. Offer another way to get paid too.[10] |
03State vs federal
Montana vs federal law
Montana sets a stricter rule than federal law on 3 of the 10 rules below, starting with a $10.85 minimum wage against the federal $7.25. Where the two differ, the rule that is better for the worker applies.
| Rule | Federal (FLSA) | Montana | Comparison |
|---|---|---|---|
| Minimum wageStricter | Federal$7.25[7] | Montana$10.85[1] | Stricter |
| Tipped cash wageStricter | Federal$2.13[7] | Montana$10.85 (full minimum wage)[1][2] | Stricter |
| Max tip creditStricter | Federal$5.12[7] | MontanaNone | Stricter |
| Who counts as tippedNot applicable | FederalMore than $30 a month in tips, customarily and regularly received in the occupation.[7] | MontanaNot applicable: Montana has no tip credit. | Not applicable |
| Managers in the poolState rule | FederalManagers/supervisors meeting the executive duties test cannot keep employees’ tips or receive from pools; they may keep only tips received directly for services they directly and solely provide. No salary-level test is used for this tip restriction.[7] | MontanaExempt salaried managers and supervisors can't join pools. Federally covered employers also exclude anyone meeting the federal manager duties test.[3][7] | State rule |
| Kitchen in the poolState rule | FederalCooks and dishwashers may join a nontraditional mandatory pool only when all workers receive a direct cash wage of at least the full federal minimum wage and no tip credit is taken; employer/managers/supervisors remain excluded. State law may be stricter.[7] | MontanaCooks, dishwashers and other food-preparation/customer-service employees may participate; employers and disqualified managers may not.[3] | State rule |
| Card fees from tipsSame as federal | FederalOnly the actual proportional credit-card transaction fee may be deducted from charged tips; no deduction exceeding that fee or reducing required minimum wages; state law may forbid even that deduction.[7] | MontanaTip's share of the fee only[4] | Same as federal |
| Card tip payoutState rule | FederalCharged tips due by regular payday, without waiting for processor reimbursement. Employer-administered pools fully distributed by regular payday for the workweek/pay period; if the amount/distribution cannot be determined before payroll, distribute as soon as practicable afterward.[7] | MontanaEmployer-collected pool tips must be fully distributed no later than regular payday for the collection workweek.[3] | State rule |
| Mandatory service chargesState rule | FederalA compulsory service charge is not an FLSA tip. Amounts distributed to employees are wages that may satisfy wage obligations and must enter the regular rate for overtime. This federal wage classification does not decide contractual or state-law ownership.[7] | MontanaA fixed charge added instead of a tip goes to nonmanagement food, beverage or related-service staff under a tip pool agreement.[9] | State rule |
| Overtime for tipped staffState rule | FederalFor covered nonexempt employees, overtime generally begins after 40 hours in a workweek. Use the full regular rate, at least the full federal minimum wage, not $2.13; the hourly tip credit is not increased for overtime. Voluntary tips above the tip credit are excluded; distributed service charges enter the regular rate.[7] | MontanaGenerally time and a half after 40 hours. Tips don't replace the required cash wage.[11] | State rule |
Every state starts from the same federal floor. Federal tip law baseline: the FLSA rules, rates and sources, and how Montana fits among the four tip credit classes.
04Wages
Minimum wage and the tip credit in Montana
Montana doesn't allow a tip credit. Tipped staff earn the full $10.85 an hour from the employer, and every tip lands on top.[2]
One server, one 30-hour week in Montana
No tip credit means tips never reduce what you pay. A slow night doesn't change the wage line. Fictional worker and tips.
- Tip credit conditions
- Not applicable: Montana has no tip credit.
- Who counts as tipped
- Not applicable: Montana has no tip credit.
- Overtime
- Generally time and a half after 40 hours. Tips don't replace the required cash wage.[11]
- Side work and dual jobs
- Not applicable: Montana has no tip credit.
06Tip pool
Who can be in the tip pool in Montana
Montana allows tip pools, and employers can make them mandatory. Owners, managers and supervisors can't share in them. A tip pool collects tips and splits them among staff; a tip-out is one worker handing part of their tips to others.
| Role | Can share? | Condition |
|---|---|---|
| Front of house | ||
| Server | Allowed | Must provide customer service or food preparation.[3] |
| Bartender | Allowed | Must provide customer service or food preparation.[3] |
| Busser | Allowed | Must provide customer service or food preparation.[3] |
| Food runner | Allowed | Must provide customer service or food preparation.[3] |
| Host | Allowed | Must provide customer service or food preparation.[3] |
| Barback | Allowed | Must provide customer service or food preparation.[3] |
| Expo | Allowed | Must provide customer service or food preparation.[3] |
| Back of house | ||
| Cook | Allowed | Must provide customer service or food preparation.[3] |
| Dishwasher | Allowed | Must provide customer service or food preparation.[3] |
| Leadership | ||
| Shift lead | Depends | Allowed only if no disqualifying supervisory/management status.[3] |
| Manager or supervisor | Not allowed | Not eligible for employees’ pool; personal direct-service tips are separate.[3] |
| Owner | Not allowed | Not eligible for employees’ pool; personal direct-service tips are separate.[3] |
- Managers and supervisors
- Exempt salaried managers and supervisors can't join pools. Federally covered employers also exclude anyone meeting the federal manager duties test.[3][7]
- Owners
- Employers cannot participate in the pool; directly received tips for their own service are treated separately.[3]
- Back of house
- Cooks, dishwashers and other food-preparation/customer-service employees may participate; employers and disqualified managers may not.[3]
- Who sets the percentages
- Employer may impose a pool and must notify employees of required participation.[3]
- Cap on what a pool can take
- A required contribution cannot exceed the employee’s tips; there is no minimum or maximum contribution percentage.[3]
- Pooling allowed
- Yes.[3]
07Put it to work
Setting up a tip pool in Montana
Under Montana rules, 9 of the 10 staff in this example can share a $1,200 pool. The table splits the same pool by percentage, by points and by hours.
| Who | By % | By points | By hours |
|---|---|---|---|
| Maya | $220.00 | $203.39 | $133.34 |
| Jordan | $220.00 | $203.39 | $133.33 |
| Priya | $220.00 | $203.39 | $133.33 |
| Sam | $144.00 | $162.71 | $133.33 |
| Luis | $90.00 | $101.69 | $111.11 |
| Ava | $90.00 | $101.69 | $111.11 |
| Theo | $72.00 | $81.36 | $155.56 |
| Kim | $72.00 | $81.36 | $155.56 |
| Rafa | $72.00 | $61.02 | $133.33 |
| Dana | Not in the pool. Not eligible for employees’ pool; personal direct-service tips are separate. | ||
| Total | $1,200.00 | $1,200.00 | $1,200.00 |
Fictional restaurant and staff. Percentages and point weights are examples, not a recommendation. Shares are rounded to the cent, and any leftover cent goes to the first server. Run your own numbers in the tip pooling calculator.
Ferry Tip Manager: support pool split by hours
Servers and bartenders pay into the support pool, and Tip Manager splits it by hours worked. Each person sees their share, with no spreadsheet at close.
Who it's for Full-service restaurants that tip out bussers, runners and bar backs
08Service charges
Service charges vs tips in Montana
In Montana whether a mandatory service charge counts as a tip depends on the facts. A fixed charge added instead of a tip goes to nonmanagement food, beverage or related-service staff under a tip pool agreement.
| Question | OptionalTip | MandatoryService charge |
|---|---|---|
| Who sets the amount | The guest | The business |
| Who it belongs to | The worker it was left for, or the pool | A fixed charge added instead of a tip goes to nonmanagement food, beverage or related-service staff under a tip pool agreement.[9] |
| Can it go to staff? | Yes, through the pool | Yes. Amounts paid to staff are wages, not tips.[7] |
| How it's taxed (federal) | Tip income the worker reports | Regular wages, with payroll taxes[13][14] |
| Guest notice | None needed | No state rule. Federal law sets no menu or receipt notice rule.[12] |
- Step 1Did the guest choose whether to pay it, and how much?YesIt's a tip. It belongs to staff.NoIt's a mandatory charge. Go to step 2.
- Step 2What does Montana say?Depends on the factsA fixed charge added instead of a tip goes to nonmanagement food, beverage or related-service staff under a tip pool agreement.[9]
- Step 3Check the cityNo city service charge rules on file for Montana.
- Menu and receipt notice
- No state rule. Federal law sets no menu or receipt notice rule.[12]
- Large-party auto gratuities
- Fixed in-lieu-of-tip restaurant charges count as service charges and go to employees.[9]
Local service charge rules
No local service charge rules on file for Montana.
More on the difference: service charge vs tip.
Unusual rule
Service charges belong to the crew
In Montana, a fixed charge added in place of a tip has to go to nonmanagement staff. The house doesn't keep it.[9]
- The employer collects the charge.
- It goes to nonmanagement staff who prepare or serve the food or drinks, or work in related service.
- It's paid out under a tip pool agreement.
09Card tips
Card tips in Montana: fees and payout timing
In Montana only the tip's share of the card processing fee can come out of a card tip. Payout deadline: employer-collected pool tips must be fully distributed no later than regular payday for the collection workweek.
Employers may take only the card company's percentage from charged tips or service charges, and must keep a record of each deduction.[4]
When card tips have to land
- TonightGuest adds a tip On the card, at the table.
- CloseShift is tallied The pool is split by your rules.
- DeadlineMontana rule Employer-collected pool tips must be fully distributed no later than regular payday for the collection workweek.[3]
- Last dayFinal pay Quit: next payday or 15 days, whichever comes first. Fired or laid off: right away, unless a written policy allows later within that limit.[11]
Paydays: Pay wages within 10 business days after the end of the pay period.[11]
Paying tips on a payroll card
- Allowed?Depends
- Worker consent needed?Yes
- Free way to get the money?State ruleFull wages reachable in cash with no fee on the first withdrawal. Charges must be clearly disclosed.[10]
- Must you offer another option?Yes
- Holding cash tipsState ruleThe same regular-payday distribution deadline applies to employer-collected cash tips in a pool.[3]
- Tips shown on the pay stubNo (federal)No state rule. Federal rule applies: no. FLSA does not require pay stubs; state laws and employer records are separate.[15][12]
Ferry Pay: each tip share, paid out digitally
Each person's direct tips, tip outs and payable amount in one view, then paid through Ferry Pay. No cash to keep on hand for payouts. Eligibility and fees apply.
Who it's for Operators who want to stop the nightly cash run
“Since launching this card program, we've reduced our cash-carrying costs by over 66 percent”
10Records
Records and notices in Montana
Keep each tipped worker's tips and hours on record, shift by shift. Montana: at least 3 years for payroll records under adopted federal rule 29 CFR 516.5.
Montana State
- Tip records Employers operating mandatory pools must retain payroll/other records evidencing tips received and distributed.[3]
- How long to keep them At least 3 years for payroll records under adopted federal rule 29 CFR 516.5.[16]
- Tip credit notice Not applicable: Montana has no tip credit.
- Posters and forms Montana wage and hour poster is recommended, not a mandatory state posting.[2]
Everywhere Federal
- Tip records Maintain employee identity, time and pay records. Tip-credit employers additionally retain tipped employee, reported tips, credit amounts and hours/earnings by tipped and nontipped occupation. No-tip-credit employers operating mandatory pools record each recipient and weekly/monthly tips. IRS daily records/reporting are separate obligations.[7]
- How long to keep them FLSA: payroll records at least three years; underlying wage-computation records two years. Tax retention is separate.[17]
- Tip credit notice Not needed in Montana: there's no tip credit.
- A written pool policy Good practice, not a federal rule: who's in, how it splits, when it pays. Share it with staff. How to write one.
Think your tips were handled wrong in Montana?
Workers in Montana can file a tip or wage claim with the Montana Department of Labor and Industry, Employment Standards Division (406-444-6543). Filing is free, and this page can't settle a dispute; the state can.[2]
Retaliation: Federal law protects employees asserting FLSA wage rights against retaliation, even where their work or employer is not FLSA-covered.[18]
Penalties: Wage payment violations are misdemeanors. Employers owe the unpaid wages plus a penalty of up to 110% of them.[19]
Can they take this out of my tips?
- Walkouts and dine-and-dashNot allowedState wages cannot be withheld for damages, mistakes or shortages.[8]
- BreakageNot allowedState wages cannot be withheld for damages, mistakes or shortages.[8]
- Register shortagesNot allowedState wages cannot be withheld for damages, mistakes or shortages.[8]
- UniformsNot allowedTips belong to employees; FLSA-covered employers cannot use employees’ tips for employer uniform costs. Ordinary wage deductions are separate.[7]
- Card processing feesAllowedOnly the card company’s percentage on charged tips or service charges; retain deduction records.[4]
- A manager's shareNot allowedNo employer or disqualified manager share of employees’ pool.[3]
11Law changes
What changed in Montana tip law, and what's coming
Next scheduled change: the Montana minimum wage goes to $11.20 on . Most recent change: General minimum wage rose to $10.85. The tip credit is still prohibited ().
Bills and ballot measures
Nothing pending as of .
Key statutes
- MCA 39-3-201 and 39-3-218
- MCA 39-3-204 through 39-3-214
- MCA 39-3-409 and 7-1-4203
- ARM adoption of 29 CFR 516/531 as of 2023-10-27
12FAQ
Montana tip law questions
Plain answers to the 8 questions restaurant owners and staff ask most about Montana tip law, each linked to its source.
Can Montana employers take a tip credit?
No. Covered workers get the full cash minimum wage before tips.[2]
What is Montana's minimum wage in 2026?
What changes in 2027?
The general minimum wage rises to $11.20 an hour on January 1, 2027.[6]
Can the restaurant require a tip pool?
Yes. The employer must tell workers about the required pool and can't take part in it.[3]
Can cooks and dishwashers join a pool?
Yes. Montana allows food prep and customer service workers, cooks and dishwashers included.[3]
Is there a cap on tip-outs?
A worker can't be required to put in more than the tips they received. Montana sets no minimum or maximum percentage.[3]
Do service charges belong to staff?
A fixed charge added instead of a tip goes to nonmanagement staff who prepare or serve food or drinks, or do related service, under a tip pool agreement.[9]
Do workers have to accept a payroll card?
Not without consent. The worker must agree, have the option of a check, and get full wages in cash free on the first withdrawal.[10]
13Compare
How Montana compares with nearby states
Montana borders Idaho, North Dakota, South Dakota and Wyoming. South Dakota pays a higher minimum wage than Montana's $10.85. Running locations on both sides of a line? Each one follows its own state's rules.
Neighboring states
States with the same rules
Same tip credit class as Montana: No tip credit.
- Alaska tip laws$14.00 min wage No tip credit Also no tip credit, and only the tip's share of card fees
- Oregon tip laws$15.55 min wage No tip credit Also no tip credit, and only the tip's share of card fees
- Washington tip laws$17.13 min wage No tip credit Also no tip credit, and only the tip's share of card fees
- Nevada tip laws$12.00 min wage No tip credit Also no tip credit
- California tip laws$16.90 min wage No tip credit Also no tip credit
- Minnesota tip laws$11.41 min wage No tip credit Also no tip credit
The law decides who's in. Ferry runs the split.
See how operators set pool rules in Ferry Tip Manager and pay tips out without a cash run. Bring your own Montana setup.
14Sources
Sources for Montana tip laws
Every figure on this page links to one of these 19 sources: 15 for Montana and 4 for the federal baseline. They are statutes, regulations and government agency pages, each with the date it was checked.
- 1Minimum Wage Determination 2026Montana Department of Labor and Industry · Official source · Page updated · Checked Pinpoint: 2026 Determination, paragraph 1erd.dli.mt.gov/_docs/labor-standards/MW-Determination-Letter.2026.pdf
What the source says
“Pursuant to §39-3-409 MCA, Montana’s Minimum Wage will increase to $10.85 per hour effective January 1, 2026.”
- 2Montana Minimum WageMontana Department of Labor and Industry · Official source · Checked Pinpoint: minimum wage exclusions; Exceptionerd.dli.mt.gov/labor-standards/wage-and-hour-payment-act/state-minimum-wage
What the source says
“No tip credit, meal credit, or training wage is allowed under Montana's Wage & Hour Laws.”
“A business not covered by the Fair Labor Standards Act whose gross annual sales are $110,000 or less may pay $4.00 per hour.”
“The Montana Wage & Hour Poster is an optional posting recommended for employers to display alongside required labor postings.”
- 3MCA 39-3-218 Tip PoolsMontana Legislature · Official source · Page updated 2025 · Checked Pinpoint: 39-3-218(1); 39-3-218(2); 39-3-218(3)(b)-(c)mca.legmt.gov/bills/mca/title_0390/chapter_0030/part_0020/section_0180/0390-0030-0020-0180.html
What the source says
“An employer may impose a tip pooling arrangement as provided in this section.”
“A tip pooling arrangement may include employees involved in providing customer service or food preparation, including but not limited to servers, hosts, bussers, dishwashers, cooks, or other employees.”
“may not include exempt salaried supervisors or managers in a tip pool.”
- 4ARM 24.16.3022 Tips or Service Charges, active versionMontana Secretary of State · Official source · Page updated · Checked rules.mt.gov/api/policy-library-public/collections/aec52c46-128e-4279-9068-8af5d5432d74/policies/4856f47b-a826-425a-bf3e-d0ff13da6508/document/709774a1-074b-4b68-80a9-b2851b16ca07
What the source says
“Where tips or service charges are charged on a credit card and the employer must pay the credit card company a percentage on each sale, the employer may pay the employee the tip, less that percentage.”
- 5MCA 7-1-4203 Local Employer MandatesMontana Legislature · Official source · Page updated 2025 · Checked Pinpoint: 7-1-4203(1)mca.legmt.gov/bills/mca/title_0070/chapter_0010/part_0420/section_0030/0070-0010-0420-0030.html
What the source says
“A political subdivision may not enact, administer, or otherwise require an employer to provide an employee or class of employees with a wage or employment benefit that is not required by state or federal law.”
- 6Minimum Wage Determination 2027Montana Department of Labor and Industry · Official source · Page updated · Checked Pinpoint: 2027 determination, paragraph 1erd.dli.mt.gov/labor-standards/wage-and-hour-payment-act/MW-Determination-Letter1.pdf
What the source says
“Pursuant to §39-3-409 MCA, Montana’s Minimum Wage will increase to $11.20 per hour effective January 1, 2027.”
- 7Fact Sheet 15 Federal Tipped EmployeesU.S. Department of Labor · Official source · Checked Pinpoint: Managers and Supervisors; Employers, Including Managers and Supervisors, May Not Keep Tips; Tip Credit, paragraph 2www.dol.gov/agencies/whd/fact-sheets/15-tipped-employees-flsa
What the source says
“An employer may not receive tips from such a tip pool and may not allow managers and supervisors to receive tips from the pool.”
“Regardless of whether an employer takes a tip credit, the FLSA prohibits employers from keeping any portion of employees’ tips for any purpose, whether directly or through a tip pool.”
“An employer must pay a tipped worker at least $2.13 per hour under the FLSA.”
- 8Wage and Hour FAQsMontana Department of Labor and Industry · Official source · Checked Pinpoint: Payroll Deductions, damages/shortages questionerd.dli.mt.gov/labor-standards/wage-and-hour-payment-act/wage-and-hour-faq
What the source says
“The employer cannot withhold wages or make an employee pay for damages, mistakes, or shortages.”
- 9MCA 39-3-201 Wage DefinitionsMontana Legislature · Official source · Page updated 2025 · Checked Pinpoint: 39-3-201(6)(b)mca.legmt.gov/bills/mca/title_0390/chapter_0030/part_0020/section_0010/0390-0030-0020-0010.html
What the source says
“It is collected by the employer and must be distributed directly to the nonmanagement employee preparing or serving the food or beverage or to any other employee involved in related services, pursuant to a tip pool agreement.”
- 10Electronic PaymentsMontana Department of Labor and Industry · Official source · Checked Pinpoint: May an employer use a debit card?; Debit-card conditions(b); Debit-card conditions(d)erd.dli.mt.gov/labor-standards/wage-and-hour-payment-act/electronic-payments
What the source says
“Yes, if all of the following conditions are met:”
“the employee consents to the use of the debit card;”
“the full amount of the wages can be accessed, in cash, without incurring a fee in the initial withdrawal;”
- 11Montana 2026 Wage and Hour PosterMontana Department of Labor and Industry · Official source · Page updated 2026 · Checked Pinpoint: OVERTIME PAY; PAYMENT OF WAGES; WHEN SEPARATED FROM EMPLOYMENTerd.dli.mt.gov/_docs/labor-standards/2026-MINIMUM-WAGE-POSTER.pdf
What the source says
“Employees who work in excess of 40 hours in a workweek must receive overtime compensation at a rate of at least 1½ times their regular hourly rate for those hours worked over 40.”
“An employee must be paid within 10 business days after the end of the pay period.”
“When an employee quits, wages are due on the next scheduled pay day for the period in which the employee was separated, or 15 calendar days, whichever occurs first.”
- 12MCA 39-3 Part 2 indexMontana Legislature · Official source · Page updated 2025 · Checked mca.legmt.gov/bills/mca/title_0390/chapter_0030/part_0020/sections_index.html
What the source says
“39-3-218 Tip pools allowed -- requirements -- prohibitions -- compulsory charges distinguished”
- 13Tip recordkeeping and reportingInternal Revenue Service · Official source · Checked Pinpoint: Service charges are not tips, paragraph 2; qualified tips deduction, net-income limit; tip income, Social Security/Medicarewww.irs.gov/businesses/small-businesses-self-employed/tip-recordkeeping-and-reporting
What the source says
“Service charges (also referred to as “auto-gratuities”), when distributed to an employee, are generally treated as wages paid by the employer to the employee rather than tips paid by the customer.”
“For self-employed individuals, the deduction may not exceed the individual’s net income (without regard to this deduction) from the trade or business in which the tips were earned.”
“These amounts are subject to federal income tax and generally are also subject to Social Security and Medicare taxes.”
- 14Revenue Ruling 2012-18Internal Revenue Service · Official source · Page updated 2012 · Checked Pinpoint: Q 1/A 1, four distinguishing factors; p. 1, ruling headingwww.irs.gov/pub/irs-drop/rr-12-18.pdf
What the source says
“compulsion; (2) the customer must have the unrestricted right to determine the amount; (3) the payment should not be the subject of negotiation or dictated by employer policy; and (4) generally, the customer has the right to determine who receives the payment.”
“Rev. Rul. 2012-18”
- 15Questions and Answers About the FLSA, DOL WHDU.S. Department of Labor · Official source · Checked Pinpoint: Recordkeeping and Notices, Are pay stubs required?www.dol.gov/agencies/whd/flsa/faq
What the source says
“However, the FLSA does not require an employer to provide employees pay stubs.”
- 1629 CFR 516 adopted October 2023 editionMontana Department of Labor and Industry · Official source · Page updated · Checked Pinpoint: 29 CFR 516.5, employer payroll recordserd.dli.mt.gov/_docs/labor-standards/Part-516_Eff-10-2023.pdf
What the source says
“at least 3 years”
- 17Fact Sheet #21: Recordkeeping Requirements under the Fair Labor Standards Act (FLSA)U.S. Department of Labor · Official source · Page updated · Checked Pinpoint: Posting, paragraph 1www.dol.gov/agencies/whd/fact-sheets/21-flsa-recordkeeping
What the source says
“Each employer shall preserve for at least three years payroll records, collective bargaining agreements, sales and purchase records.”
“Employers must display an official poster outlining the provisions of the Act, available at no cost from local offices of the Wage and Hour Division and toll-free, by calling 1-866-4USWage (1-866-487-9243).”
“Records on which wage computations are based should be retained for two years,”
- 18Fact Sheet 77A RetaliationU.S. Department of Labor · Official source · Checked Pinpoint: Prohibitions and Coveragewww.dol.gov/agencies/whd/fact-sheets/77a-flsa-prohibiting-retaliation
What the source says
“discharge or in any other manner discriminate against any employee because such employee has filed any complaint”
- 19MCA 39-3-206 Penalty for NonpaymentMontana Legislature · Official source · Page updated 2025 · Checked Pinpoint: 39-3-206(1)mca.legmt.gov/bills/mca/title_0390/chapter_0030/part_0020/section_0060/0390-0030-0020-0060.html
What the source says
“A penalty must also be assessed against and paid by the employer to the employee in an amount not to exceed 110% of the wages due and unpaid.”
15Methodology
How we research these pages
Every figure on this page comes from an official source, a statute, a regulation or a government agency page, and links to it where it is used. Ferry checks the page against those sources on a schedule and logs every change.
- 1
Official sources only
Statutes, regulations, state labor agencies, city ordinances and the U.S. Department of Labor. No vendor blogs, no AI answers, no secondary summaries as the only source.
- 2
Every figure is linked
Each rate and rule carries a numbered link to the statute or agency page behind it, with the exact pinpoint and, where available, a link that opens at the sentence itself.
- 3
Re-checked on a schedule
Every page is re-checked each January and July, and whenever a state or city changes a rate. Cash wage plus tip credit is checked against the minimum wage on every build.
- 4
Gaps are left out, not guessed
If a rule can't be confirmed from an official source, it isn't shown. The page points to the state agency instead.
What changed on this page
- First version of this page. Every figure was checked against the official sources listed on this page.
Researched by Ferry's tip operations research team. Last reviewed .
Changes to the law itself are listed in What changed and what's coming.
16Every state
Tip laws in every state
Pick any state for its tip credit, tip pool, service charge and card tip rules. Each chip shows the state's tip credit class.
- No tip creditNo tip credit
- Above $2.13Tip credit, cash wage above federal
- $2.13 cashTip credit, federal cash wage
- FederalFederal rates apply
51 of 51 state pages. Open the master guide for the federal baseline, tip credit classes and the full comparison table.