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Wage & Hour

Tipped Minimum Wage

Tipped employees typically receive a reduced minimum wage and rely primarily on tips to survive. Our attorneys help ensure tipped workers are paid the proper wage rate and that their tips are not unlawfully taken by employers and paid to other workers.

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Tipped Minimum Wage Details

If you are an employee who regularly and customarily receives more than $30 in tips a month, the federal law allows your employer to pay you a wage below the federal minimum rate under certain circumstances. This is called a tip credit. Your employer can take a tip credit if it notifies you that it is doing so and provides you with the appropriate information.

A tip credit allows your employer to count some of your tips towards its wage payment obligations, but only if you earn enough tips to cover the difference between your reduced wage rate and the normal federal minimum wage. During slow weeks when you make little to no tips, you employer may need to pay you a greater wage to ensure you are at least earning the federal minimum. Employers may forget to ensure minimum wages are earned, or may even illegally fail to pay tipped employees any wages. This is illegal, and our lawyers may be able to help if this is happening to you.

While the law does allow employers to require tipped employees to pool their tips together in a valid sharing arrangement, employers commonly violate these rules by including, for example, kitchen employees or management in the tip pool.

The tip credit and tip pooling rules can be complicated. Our knowledgeable wage and hour lawyers can help you determine whether your minimum wage rights are being violated.

Examples of Potential Tipped Minimum Wage Violations

Some of the practices we see relating to tipped employees that may result in a minimum wage violation are provided below:

  • An exotic dance club does not pay dancers any wages and requires the dancers to pay money to work and to tip out DJs and other employees.
  • A restaurant requires servers receiving the tip credit to participate in a tip pool with kitchen staff.
  • A coffee shop pockets a portion of a valid tip pool among baristas.
  • A hotel does not provide additional wages to a bellhop who has a slow week and therefore does not receive enough tips to cover the difference between the tip credit and the standard minimum wage.

The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for advice regarding your individual situation. We invite you to contact us and welcome your calls, letters and electronic mail. Contacting us does not create an attorney-client relationship. Please do not send any confidential information to us until such time as an attorney-client relationship has been established. Read full Disclaimer.

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