Maryland Tipping Laws & Regulations (2026)

Tip Credit Rules

Maryland allows employers to claim a tip credit of $11.37 per hour (as of 2024), provided that:

• The employee receives tips that, combined with the $3.63 base wage, equal or exceed the $15.00 minimum wage
• The employee is customarily tipped (servers, bartenders, cocktail servers, bussers)
• The employee is informed of the tip credit policy in writing before employment begins
• Tips are properly documented and claimed
• If tips fall short in any pay period, the employer must immediately make up the difference

Tip Pooling Regulations

Maryland allows pooled tip arrangements with specific restrictions:

• Tips may only be pooled among employees who are customarily tipped (servers, bartenders, bussers, food runners)
• Non-tipped employees (kitchen staff, dishwashers) cannot participate in tip pools
• Managers, supervisors, and employers are explicitly excluded from participating in or receiving tips from tip pools
• The tip pool must be reasonable and transparent to all participants
• Employees must be informed in writing of any tip pooling arrangements before employment begins

Tip Sharing Policies

While tip sharing is allowed within legal parameters:

• Servers may voluntarily share tips with front-of-house staff (bussers, runners, hosts)
• Tips cannot be shared with non-customarily-tipped positions without strict compliance review
• An employer cannot require tips to be shared as a condition of employment
• Each shared arrangement should be documented in writing with employee consent
• Management cannot compel tip sharing or retain any portion of tips

Overtime Rules for Tipped Employees

When calculating overtime for tipped employees:

• Overtime is calculated on the full minimum wage ($15.00), not the reduced tipped wage
• Tipped employees are entitled to 1.5x the full minimum wage for hours over 40 per week
• This rule often gets overlooked by Maryland employers, leading to compliance violations
• Gratuity Solutions automatically recalculates for overtime compliance

Record-Keeping Requirements

Maryland employers must maintain:

• Daily tip records for each employee claiming tip credit
• Documentation of the tip credit policy provided to employees
• Proof of any tip make-up payments when tips fall short
• Records of tip pooling or sharing arrangements and written employee consent
• These records must be kept for at least 3 years and made available for inspection

Unique Provision: Manager Exclusion from Tip Pools

Maryland's law explicitly bars managers and supervisors from participating in or benefiting from tip pools. This is a strict requirement:

• Managers cannot take a "cut" of the tip pool even if they occasionally wait tables
• The distinction between management and tipped employees is clear and strictly enforced
• Owners cannot receive any tips or portions thereof
• This creates a bright-line compliance rule that protects both employers and employees