Oregon tip pooling rules for restaurants (2026): who can share

Oregon is one of a small group of states where employers cannot take a tip credit, which means servers are paid the full minimum wage before tips. That simplifies some questions and complicates others. This guide, checked in October 2026, explains who can take part in a tip pool in an Oregon restaurant, how state and federal rules interact, what went wrong in a notable Portland case, and how to document your policy. It is general information, not legal advice. Check ORS 653.035 and the current guidance from the Bureau of Labor and Industries and the U.S. Department of Labor, or ask an employment lawyer.

What is the starting point: no tip credit

The state labor agency has said that tip credits are illegal in Oregon. The statute says that an employer may not include any amount received by employees as tips in determining the minimum wage. In practice, every employee, tipped or not, must receive at least the state or local minimum wage from the employer, with tips on top. Regional rates differ: a higher rate applies in the Portland metro area, a standard rate for most of the state and a lower rate in nonurban counties, and they are adjusted each July.

Can you run a tip pool?

Yes. Oregon law permits tip pools, and federal law is the main source of limits. The U.S. Department of Labor's guidance says that, under federal law, cooks and dishwashers can be in a pool only if the employer pays everyone in the pool at least the full minimum wage and takes no tip credit. Oregon employers cannot take a tip credit, so a pool can include back-of-house employees, not only servers, bussers and bartenders. The guidance also says managers and supervisors may not receive tips from a pool, whether or not the employer takes a tip credit.

Who cannot share?

Managers and supervisors, under the Department of Labor's Fact Sheet 15B, and owners who act as employers. The Department reaffirmed in a December 2024 opinion letter that managers and supervisors are prohibited from participating in tip pools, and whether someone counts as a manager depends on their duties, not their title. The same guidance says a manager who directly and solely serves a customer may keep that customer's tip, but may not receive other employees' tips through the pool. The Oregon Restaurant and Lodging Association, according to a law firm article, recommends that managers take no tips at all in places with a pool, which is the cautious policy. Check ORS 653.035 and the current guidance from BOLI and the Department of Labor for anything specific to Oregon.

What happened in the Portland case?

Willamette Week reported in 2024 that a number of Portland restaurant owners were running afoul of federal rules by pooling employees' tips with managers. In one reported case, a restaurant group's owners agreed to a settlement of $570,000 after managers received tips from the pool. The lesson is that the risk is not hypothetical, and that back pay can reach many employees across years. State officials directed at least one inquiring worker to the federal Department of Labor for enforcement of tipping rules, so expect federal investigators, not only state ones.

How should you set up a pool?

Write a policy that answers these questions: who is in the pool (by job title, not by name), how the pool is divided (by hours, by points or equally), how often it is paid out, and how card processing fees are handled. Federal guidance allows deducting a share of the processing cost from tips left on cards, in proportion, but check it with your payroll provider. Make sure the policy is applied the same way every week. Give each employee a copy, and have them sign it.

What about service charges?

A mandatory service charge, such as an automatic charge for large parties, is not a tip under federal rules. It is revenue to the business, and you can use it as you wish, including to pay wages or distribute to staff, though the way it is described to customers matters. If your menu says that the charge goes to servers, then it should. Make sure the charge is clearly disclosed to guests, and that it is not described as a gratuity unless it goes to staff.

What should you do about tip-outs?

Many restaurants require servers to tip out bussers, bartenders and food runners at the end of a shift. These can fit inside the rules if only eligible employees receive the money. Do not include managers, and keep a record of the formula. If you require tipping out to the kitchen, document it clearly as a pool, and do not let a manager receive any share.

A short policy template to adapt

A clear written policy is the best protection. It can be as short as a page: the covered roles; the method of dividing the pool, for example by hours worked; the pay period in which tips are paid out; the rule that owners, managers and supervisors take no share and no tips from the pool; how card fees are handled; how disputes are raised; and the date the policy takes effect. Add a line that the policy will be reviewed each year. Have every covered employee sign a copy, and keep the signed copies with payroll records. If you change the formula, give notice before the change takes effect.

Where should you get advice?

Ask the Bureau of Labor and Industries for guidance on state wage rules, the Department of Labor for federal tip rules, and an employment lawyer for your own policy. The Oregon Restaurant and Lodging Association publishes guidance for members. Re-read your policy once a year, because the law and the case history change.

More guides for your business:

• Oregon Fair Work Week law: does it apply to your restaurant?
• How to price a menu in Oregon where there is no tip credit
• Oregon alcohol service permit for restaurant staff: OLCC rules

More in the US guides for food businesses.