Kentucky restaurant pay rules (2026): what to pay tipped and non-tipped staff

Kentucky's minimum wage is $7.25 an hour, the same as the federal rate, and state law raises it automatically if the federal rate goes up (KRS 337.275). Tipped staff can be paid $2.13 in cash wages when tips make up the rest (Ky. wage and hour poster). Two rules set Kentucky apart. Its weekly overtime law leaves out restaurant staff, so the federal 40-hour line is the one that counts, but its seventh-day law doesn't: someone who works all seven days of a workweek gets time and a half for the seventh (KRS 337.050). And everyone gets a paid 10-minute rest break in every four hours worked, plus a lunch that starts between the third and the fifth hour of the shift (KRS 337.365; KRS 337.355).

This page puts Kentucky's figures in one place. It covers what you owe tipped staff like servers and bartenders, what you owe everyone else, and two example weeks with the math shown. Every figure links to the official page it comes from.

Updated September 24, 2026: these figures are still current. Kentucky's minimum wage is $7.25 an hour ($2.13 cash wage for tipped employees). No increase is scheduled. On April 10, 2026, a new law took effect: a tip pool may include tipped employees, a term that now also covers staff whose work directly supports the service customers tip for, but not salaried employees, managers or supervisors (KRS 337.065; HB 185 (2026)). An emergency regulation filed on August 12, 2026 says an employer may require employees to take part in a tip pool (803 KAR 1:081E).

This is general information, not legal advice. Whether a rule applies can depend on your business's size and your own facts; the note at the end says more.

Kentucky pay rules at a glance

As of April 1, 2026:

Sources: Ky. Labor Cabinet, wages and hours; Ky. wage and hour poster; US DOL, tipped wages by state; KRS 337.275; US DOL, overtime; KRS 337.050.

Small businesses. Kentucky's minimum wage and weekly overtime law doesn't reach employees of a restaurant, store, service business, hotel or motel whose gross sales have averaged under $95,000 a year over the past five years (KRS 337.010). The federal law can still cover a restaurant that size, through staff whose work regularly involves commerce across state lines (DOL Fact Sheet #14).

Who counts as a tipped employee in Kentucky

In Kentucky, a tipped employee is someone who customarily and regularly receives more than $30 a month in tips (KRS 337.275).

In a restaurant that usually means servers, bartenders, bussers and counter staff who serve customers, including baristas who get tips. Cooks and dishwashers usually aren't tipped employees. Only tips the employee actually receives count. If someone works two jobs, say a server who also works prep shifts, the tip credit applies only to the hours in the tipped job (DOL Fact Sheet #15).

What you must pay tipped staff in Kentucky

Servers, bartenders, bussers and baristas who get tips can be paid a lower cash wage, with part of their tips counted toward the minimum wage. That's the tip credit, and it comes with conditions:

• Pay at least $2.13 an hour in cash wages. That's the $7.25 minimum wage minus the most you can credit from tips, $5.12 (Ky. wage and hour poster).
• Cash wages plus tips must reach $7.25 for every hour worked, week by week. If tips fall short in a workweek, you pay the difference by the regular payday for that week (DOL Fact Sheet #15).
• Tell them first. Before you take the tip credit, tell each tipped employee, in writing or out loud: the cash wage you pay, the tip credit you claim, that the credit can't be more than the tips they actually get, that they keep all their tips except through a valid tip pool, and that the credit doesn't apply unless you've told them all this (DOL Fact Sheet #15).
• Overtime is figured on the full minimum wage. An overtime hour is worth 1.5 × $7.25 = $10.875. After the $5.12 tip credit, you pay at least $5.755 of it in cash wages (DOL Fact Sheet #15).

You don't have to take the tip credit. If you pay tipped staff the full $7.25 an hour, their tips are all on top, there's nothing to make up at the end of the week, and you can put kitchen staff in the tip pool (see below).

Kentucky ties the cash wage to your records: you can pay $2.13 only if they show, for each week you take the credit, that wages plus tips reached the minimum wage (Ky. wage and hour poster).

What you must pay non-tipped staff in Kentucky

Cooks, dishwashers, prep cooks, and cashiers or counter staff who don't get tips are paid like any other hourly employee:

• At least $7.25 an hour for every hour worked (Ky. Labor Cabinet, wages and hours). No tip credit applies.
• The same goes for a tipped employee's hours in a non-tipped job, like a server's prep shift (DOL Fact Sheet #15).
• Overtime is at least 1.5 times their regular rate for hours over 40 in a workweek, and for the hours worked on the seventh day when they work all seven days of a workweek. At $7.25 an hour, that's $10.875 (US DOL, overtime; KRS 337.050).
• Can they share in the tip pool? Only if you take no tip credit and pay everyone in the pool at least the full minimum wage. If you take a tip credit, a pool you require can include only staff who customarily and regularly receive tips (US DOL, tips). Managers and supervisors can never take from the pool.

Worked examples (made-up numbers)

The names, hours and tips below are made up. The rates are Kentucky's as of April 1, 2026.

A server's week: when you have to top up

Sam is a server paid the $2.13 cash wage. He works 25 hours in each of two weeks: a busy one with $370.00 in tips and a slow one with $80.00.

In the slow week, $80.00 in tips covers only part of the $128.00 tip credit (25 × $5.12), so you pay the difference by the regular payday: $181.25 − $133.25 = $48.00. In the busy week you owe nothing extra, and every dollar of tips is still Sam's.

A cook's week with overtime

Ana is a line cook paid the Kentucky minimum wage, $7.25 an hour. She works seven 6-hour days: 42 hours.

Ana worked all seven days, so Kentucky's seventh-day rule pays all 6 of her hours on the seventh day at 1.5 times the rate (KRS 337.050). Her 2 hours over 40, which the federal rule pays at time and a half, are among those 6: a premium of time and a half for the seventh day counts toward federal overtime, so they're paid at the higher rate once, not twice (29 CFR 778.203). Under the federal rule alone, she'd get 2 hours of overtime. Overtime is counted by the workweek, and hours can't be averaged across two weeks: a long week earns overtime even if the next one is short (US DOL, overtime). Bonuses can change the rate too; see Time clock, breaks and overtime: first-month payroll mistakes to avoid.

Tip pooling rules in Kentucky

Kentucky has its own tip-pool rules (Ky. wage and hour poster): Kentucky lets employees agree to split their tips, lets an employer require a tip pool as long as the pooled tips are kept in a separate account open to the pool's members, and bars employers from keeping any part of a tip beyond what the law requires them to withhold.

Federal rules apply too, and where the two differ, follow the stricter one (US DOL, tips):

• The business, its managers and supervisors never keep employees' tips. A manager can't take anything from a pool; they may keep only tips for service they directly and solely provide. An owner with a real stake who helps run the business counts as a manager too.
• With a tip credit, a pool you require can include only staff who customarily and regularly receive tips: servers, bartenders, bussers, counter staff who serve customers.
• Without a tip credit, when everyone in the pool gets at least the full minimum wage, you can include cooks and dishwashers.
• Card fees: you may reduce a card tip by the percentage the card company actually charges you, and no more (DOL Fact Sheet #15).
• Service charges aren't tips. Money you share with staff from a mandatory service charge is wages, and it counts in the regular rate for overtime (DOL Fact Sheet #15).
• Pay pooled tips out by the regular payday for the week or pay period (DOL Fact Sheet #15).

On April 1, 2026, Kentucky set no limit of its own on who could be in a pool; the limits it has now came later (see the Updated note above).

How to split a pool fairly, with a worked example: Tip pooling for new restaurant owners.

Overtime in Kentucky

Kentucky has its own overtime law (KRS 337.050): Kentucky's weekly overtime law (time and a half after 40 hours) leaves out employees of restaurant, hotel and motel operations. Its seventh-day law has no restaurant exception: an employee who works all seven days of a workweek gets time and a half for the hours worked on the seventh day, unless they weren't permitted to work more than 40 hours that week, and overtime already paid for the same hours counts toward it.

Under the federal rule, non-exempt employees get at least 1.5 times their regular rate for hours over 40 in a workweek (US DOL, overtime).

A workweek is any fixed, recurring stretch of seven days that you choose, and hours can't be averaged across two weeks. There's no daily overtime and no double time under Kentucky or federal law, and weekend or holiday hours don't earn a premium as such; the seventh day of a seven-day week, above, is the exception.

For tipped staff, overtime is figured on the full minimum wage, not the cash wage (see the tipped section above).

The weekly rule's exemption covers restaurant staff (KRS 337.285), but a bar that sells more alcohol than food isn't a restaurant for this purpose (803 KAR 1:076). The seventh-day law has no restaurant exemption and no small-business line, and it leaves out supervisors whose duties are mainly directing others (KRS 337.050).

Breaks in Kentucky

• Meal breaks: A reasonable lunch period, as close to the middle of the shift as possible, starting no sooner than three hours and no later than five hours after the shift begins, unless you and the employee agree otherwise. The law sets no length, and a duty-free meal period doesn't have to be paid (KRS 337.355).
• Rest breaks: A paid rest period of at least 10 minutes during each four hours worked, on top of the lunch period, with no cut in pay (KRS 337.365).
• Minors: Under 18: no more than five hours in a row without a lunch period of at least 30 minutes (a shorter break doesn't interrupt the five hours), and a paid rest period of at least 10 minutes during each four hours worked (KRS 339.270).

Other Kentucky rules that affect pay

• Paid sick leave: No specific Kentucky rule found — federal rules apply (KRS 65.016). No federal paid sick leave requirement. The FMLA provides unpaid, job-protected leave (up to 12 weeks) where it applies (US DOL, sick leave).
• Food handler training: A certified food protection manager is required, not a card for every employee. Who: at least one employee with supervisory and management responsibility who is a certified food protection manager, under the 2013 FDA Food Code that Kentucky adopts (902 KAR 45:005).

Paydays, final pay and deductions

• Pay at least twice a month, for all wages earned up to no more than 18 days before payday (KRS 337.020).
• Final pay. Someone who is let go or quits is paid by the next normal payday or within 14 days, whichever is later (KRS 337.055).
• Deductions you can't take: fines, cash shortages in a till two or more people use, breakage, and losses such as a customer walking out on a check, unless the loss came from the employee's willful disregard of your interests (KRS 337.060). An employer with 10 or more employees gives each one a statement of every deduction on payday (KRS 337.070).
• Uniforms. Where the job requires a uniform, what it costs to buy and launder it can't count toward the wages you pay (803 KAR 1:081).

Teenagers and alcohol

• Hours for 16- and 17-year-olds. While school is in session, no more than 6 hours on a school day or 30 a week (more with a parent's written permission), and only between 6 a.m. and 10:30 p.m. before a school day (803 KAR 1:100). In weeks school is out, there are no hour limits (Ky. Labor Cabinet, wages and hours).
• Alcohol. Staff under 20 can sell or serve alcohol only if they're at least 18 and supervised by someone 20 or older, and never as bartenders (KRS 244.090).

Local rates in Kentucky

Kentucky law bars cities and counties from requiring private employers to pay a minimum wage other than the state or federal one, or to provide employment benefits, such as paid sick leave, that state or federal law doesn't require (KRS 65.016). Louisville and Lexington had both adopted higher local minimum wages, and in 2016 the Kentucky Supreme Court held Louisville's invalid because it conflicted with the state's wage law (Ky. Supreme Court, 2016). So the state's $7.25 minimum wage applies everywhere in Kentucky, and there's no local rate table for Kentucky.

How Mays helps

Mays runs the schedule, time clock, tip pool and payroll export for each location. For Kentucky pay rules, that means:

• Positions and wages. Give each position a default hourly wage, for example the tipped cash wage for servers and at least the minimum wage for cooks. Turn on Labor law compliance and Mays looks up each location's minimum wage from its address and warns you when a position's default wage, someone's hourly wage or a punch is below it, comparing tipped positions with the tipped cash wage when it has that figure. It never blocks the save.
• A tip pool per location. Split pooled tips by hours worked, equally or by FTAR score, per pay period or day by day, and choose which positions receive. Until you pick positions under Who receives, the positions marked Tipped share the tips; if no position is marked, everyone who worked does, cooks included. So if you take a tip credit, tick Tipped position only on positions whose staff get tips, or pick them yourself. A punch with no position counts under its shift's position, or else the person's primary or only position at that location; with neither, its hours get no share, and the tip pool card shows how many punches that leaves out. Leave managers and admins out of the pool is on by default, so leave it on. The tips come from your connected POS at that location (Square or Union) or from tips synced with 7shifts time punches, and each person's share appears in the Tip Payouts report and the payroll export. With Labor law compliance on, Mays can take your card processor's fee out of card tips, but check Kentucky's rule before you turn that on: the tip pool card links the official source.
• The tip-credit make-up is yours to check. Mays doesn't compare a tipped employee's cash wages plus tips with the minimum wage, so check each workweek the way the server example above does.
• Time clock and timesheets. Staff clock in on their phone, a shared kiosk or an NFC tag. Timesheets run by pay period. Overtime is counted by the workweek, and with Labor law compliance on, by any daily, double-time and seventh-day rule the location's state sets too, which Mays reads from its address; the schedule's labor cost, the reports and the pay summary all include it.
• Payroll export. A standard CSV or a Gusto-format CSV with regular and overtime hours and pooled tips for each employee. A card surcharge you share with staff goes in as wages, not tips.
• Minors. Turn on Labor law compliance and work rules for minors at a location, and Mays warns you when a shift breaks a minor's hours or time-of-day limits under federal law, and the auto-scheduler won't put a minor on one. It doesn't track minors' breaks yet, so build a minor's meal break into their shifts when you schedule them.
• Food protection manager certificate. Turn on Labor law compliance and keep your certified manager's certificate in Mays with its expiry date. Each location shows whether someone there holds a valid one, and Mays reminds them and their managers before it expires.
• Pickups and swaps wait for you. A claim on an open shift, a pickup of a shift someone put up for grabs and a swap two coworkers agreed on all wait in Approvals until a manager approves them, so you can see whether a pickup makes a seventh straight day in the workweek before you approve it. Turn on Labor law compliance and Mays pays Kentucky's seventh-day premium at each Kentucky location, from its address: when someone works all seven days of the payroll workweek, the seventh day's hours are paid at time and a half in the schedule's labor cost, the reports and the pay summary. It doesn't apply the law's exceptions, such as supervisors, so check the official source if one reaches you.
• Breaks at the time clock. Under a location's Labor & compliance card, add Kentucky's paid 10-minute rest break and your lunch as custom breaks, so paid breaks stay in the hours you pay. Outside California, Mays doesn't track missed breaks or the lunch window, so review punches yourself.

Sources

Every figure on this page comes from these official pages, as they read on the date shown.

• Kentucky Revised Statutes § 337.275 (minimum wage), checked September 24, 2026
• Kentucky Education and Labor Cabinet, wage and hour poster (April 2024), checked September 24, 2026
• Kentucky Revised Statutes § 337.050 (seventh-day overtime), checked September 24, 2026
• Kentucky Revised Statutes § 337.365 (rest periods), checked September 24, 2026
• Kentucky Revised Statutes § 337.355 (lunch period), checked September 24, 2026
• Kentucky Revised Statutes § 337.065 (gratuities and tip pooling), checked September 24, 2026
• Kentucky Acts 2026, chapter 72 (HB 185, tip pooling), checked September 24, 2026
• 803 KAR 1:081E (emergency amendment on tips, filed August 12, 2026), checked September 24, 2026
• Kentucky Education and Labor Cabinet, wages and hours, checked September 24, 2026
• US Department of Labor, minimum wages for tipped employees by state, checked September 24, 2026
• US Department of Labor, overtime pay, checked September 24, 2026
• Kentucky Revised Statutes § 337.010 (definitions), checked September 24, 2026
• US Department of Labor, Fact Sheet #14: coverage under the FLSA, checked September 24, 2026
• US Department of Labor, Fact Sheet #15: tipped employees under the FLSA, checked September 24, 2026
• US Department of Labor, tips under the FLSA, checked September 24, 2026
• 29 CFR 778.203 (premium pay for special days, such as the seventh day of the workweek), checked September 24, 2026
• Kentucky Revised Statutes § 337.285 (weekly overtime), checked September 24, 2026
• 803 KAR 1:076 (retail, service, hotel and restaurant exemptions), checked September 24, 2026
• Kentucky Revised Statutes § 339.270 (lunch and rest periods for minors), checked September 24, 2026
• US Department of Labor, sick leave, checked September 24, 2026
• Kentucky Revised Statutes § 65.016 (no local wage or fringe benefit mandates), checked September 24, 2026
• 902 KAR 45:005 (Kentucky food code), checked September 24, 2026
• Kentucky Revised Statutes § 337.020 (paydays), checked September 24, 2026
• Kentucky Revised Statutes § 337.055 (final pay), checked September 24, 2026
• Kentucky Revised Statutes § 337.060 (deductions), checked September 24, 2026
• Kentucky Revised Statutes § 337.070 (statement of deductions), checked September 24, 2026
• 803 KAR 1:081 (wage-rate credits and tips), checked September 24, 2026
• 803 KAR 1:100 (child labor), checked September 24, 2026
• Kentucky Revised Statutes § 244.090 (employing minors to sell or serve alcohol), checked September 24, 2026
• Kentucky Supreme Court, Kentucky Restaurant Ass'n v. Louisville/Jefferson County Metro Government (2016), checked September 24, 2026

This page is general information, not legal advice. Laws change, and coverage rules (your business's size, whether federal law covers you) decide which of them apply. Check the pages above, and ask an employment lawyer or accountant about your situation.

Run Kentucky payroll on the right numbers

Set each position's wage, turn on the tip pool with managers left out, and let the time clock count overtime by the workweek. Then payroll is an export, not an evening.

Start your free trial: 30 days, every module, no card needed. Setting up a tip pool? Read Tip pooling for new restaurant owners.