Need to keep away from breaking labor legal guidelines? Then you could pay workers in line with federal, state, or native minimal wage legislation. However you probably have tipped workers, you may be capable of pay a decrease, tipped minimal wage.
Learn on to study what’s a tipped minimal wage, together with the present federal tipped wage and the tipped minimal wage by state.
What’s the tipped minimal wage?
The tipped minimal wage, or minimal money wage, is the bottom quantity you possibly can pay a tipped worker per hour of labor. A “tipped worker” is a employee in a service trade (e.g., restaurant) who typically and repeatedly receives greater than $30 per thirty days in suggestions. The tipped minimal wage is decrease than the common minimal wage as a result of employers can declare a tip credit score.
The tip credit score is the distinction between the minimal wage and the tipped minimal wage. There’s a federal tipped minimal wage. However just like the common minimal wage price, the money wage can range relying on what state your enterprise is in.
You have to pay workers the greater of the:
- Federal tipped minimal wage
- State tipped minimal wage
Federal minimal wage for tipped workers
The federal minimal wage for servers and different tipped workers is $2.13 per hour. You have to pay your tipped workers at the least $2.13 per hour.
The common minimal wage is at the moment $7.25 per hour, which means employers can declare a most tip credit score of $5.12 per hour ($7.25 – $2.13 = $5.12).
If you wish to use the FLSA tip credit score and pay workers the minimal money wage, you could present particulars. Inform workers:
- Their hourly wage (at the least $2.13 per hour)
- The extra quantity you’re claiming as a tip credit score (most $5.12)
- That the tip credit score you declare can not exceed the information your workers obtain
- That your workers retain their suggestions (until you could have a tip pooling settlement)
- The tip credit score doesn’t apply to anybody until you notify the staff
Failing to inform your workers in regards to the above means it’s essential to pay them the common minimal wage and allow them to preserve their suggestions. You possibly can allow them to know orally or in writing.
Tipped minimal wage by state
Once more, the federal tipped minimal wage price could not apply to your enterprise. State legislation trumps federal if it’s extra beneficiant to workers.
- Follows the federal tipped minimal wage legislation
- Doesn’t permit any tipped minimal wage
- Units a state tipped minimal wage
Take into account that your state’s definition of who is taken into account a “tipped worker” could also be totally different than the federal definition. For instance, employees are thought-about tipped workers in the event that they make greater than $20—not $30—per thirty days in Massachusetts.
So, what does your state require? Have a look beneath.
States that comply with the federal tipped minimal wage
In the case of the tipped wage, these states comply with the federal price of $2.13 per hour:
| Alabama | Mississippi | Texas |
| Georgia | Nebraska | Utah |
| Indiana | North Carolina | Virginia |
| Kansas | Oklahoma* | Wyoming |
| Kentucky | South Carolina | |
| Louisiana | Tennessee |
*The DOL classifies this as a state that units a better tipped minimal wage than the federal price. Nonetheless, Oklahoma’s present price is $2.13, which is identical because the federal price. For extra data, contact Oklahoma’s division of labor.
Examine together with your state for extra data on their particular guidelines. For instance, you can’t declare the tip credit score in North Carolina until you obtain a signed certification of your workers’ suggestions month-to-month or every pay interval (e.g., tip reporting sheet).
States that don’t permit a tipped minimal wage
Once more, not all states let employers pay workers a tipped minimal wage. The next states require that employers pay workers at the least the common state minimal wage along with the worker’s collected suggestions:
| Alaska | Montana | Washington |
| California | Nevada | |
| Minnesota | Oregon |
If your enterprise is positioned in one of many above states, don’t attempt to pay workers the minimal money wage.
States that set a state tipped minimal wage
Nearly all of states set their very own minimal wage for tipped workers that’s above the federal price of $2.13:
| Arizona | Iowa | North Dakota |
| Arkansas | Maine | Ohio |
| Colorado | Maryland | Pennsylvania |
| Connecticut | Massachusetts | Rhode Island |
| Delaware | Michigan | South Dakota |
| D.C. | Missouri | Vermont |
| Florida | New Hampshire | Wisconsin |
| Hawaii | New Jersey | West Virginia |
| Idaho | New Mexico | |
| Illinois | New York |
In case your state units its personal minimal money wage, there could also be some further state guidelines to remember. For instance, your state may:
- Permit a tip credit score if the worker’s mixed hourly wage and suggestions is a specific amount greater than the relevant minimal wage (e.g., Hawaii)
- Solely apply the state legislation to employers with a sure variety of workers (e.g., West Virginia)
- Solely apply the legislation to workers over a sure age (e.g., Wisconsin)
Minimal wage for tipped workers 2024: Chart
Need to understand how a lot it’s essential to pay tipped workers? Use the chart beneath to seek out out.
States with an * by their title don’t permit a separate minimal wage for tipped workers. The quantity listed is identical minimal wage it’s essential to present to your non-tipped workers.
| State | Tipped Minimal Wage |
|---|---|
| Alabama | $2.13 |
| Alaska* | $11.73 |
| Arizona | $11.35 |
| Arkansas | $2.63 |
| California* | $16.00 |
| Colorado | $11.40 |
| Connecticut | $8.23 (Bartenders who typically obtain suggestions) $6.38 (Workers who work in a lodge or restaurant) |
| D.C. | $8.00 |
| Delaware | $2.23 |
| Florida | $8.98 |
| Georgia | $2.13 |
| Hawaii | $12.75 |
| Idaho | $3.35 |
| Illinois | $8.40 |
| Indiana | $2.13 |
| Iowa | $4.35 |
| Kansas | $2.13 |
| Kentucky | $2.13 |
| Louisiana | $2.13 |
| Maine | $7.08 |
| Maryland | $3.63 |
| Massachusetts | $6.75 |
| Michigan | $3.93 |
| Minnesota* | $10.85 (Companies with gross income of $500,000 or extra) $8.85 (Companies with gross income of lower than $500,000) |
| Mississippi | $2.13 |
| Missouri | $6.15 |
| Montana* | $10.30 (Companies with gross annual gross sales over $110,000) $4.00 (Companies with gross annual gross sales of $110,000 or much less that aren’t coated by the FLSA) |
| Nebraska | $2.13 |
| Nevada* | $11.25 (Workers who don’t obtain medical health insurance from employer) $10.25 (Workers who obtain medical health insurance from employer) Starting July 1, 2024, $12.00 for all workers |
| New Hampshire | $3.27 |
| New Jersey | $5.26 |
| New Mexico | $3.00 |
| New York | $13.35 (Tipped service workers in New York Metropolis, Lengthy Island, and Westchester) $10.65 (Tipped meals service employees in New York Metropolis, Lengthy Island, and Westchester) $12.50 (Tipped service workers within the the rest of New York state) $10.00 (Tipped meals service employees within the the rest of New York state) |
| North Carolina | $2.13 |
| North Dakota | $4.86 |
| Ohio | $5.25 (Employers with annual gross receipts of $305,000 or extra) |
| Oklahoma | $2.13 |
| Oregon* | $14.20 (Employers in customary areas) $15.45 (Employers in Portland metro space) $13.20 (Employers in nonurban counties) |
| Pennsylvania | $2.83 |
| Rhode Island | $3.89 |
| South Carolina | $2.13 |
| South Dakota | $5.60 |
| Tennessee | $2.13 |
| Texas | $2.13 |
| Utah | $2.13 |
| Vermont | $6.84 (Lodge, motel, tourism, or restaurant workers who obtain greater than $120 per thirty days in suggestions) |
| Virginia | $2.13 |
| Washington* | $16.28 |
| West Virginia | $2.62 |
| Wisconsin | $2.33 |
| Wyoming | $2.13 |
Once more, verify together with your state on particular pointers relating to the tipped minimal wage.
Your workers don’t earn sufficient suggestions. Now what?
The purpose of a tip credit score is for workers’ mixed minimal money wage and tricks to be greater than the common minimal wage.
If an worker’s tipped minimal wage and suggestions usually are not sufficient to achieve the minimal wage, it’s essential to make up the distinction.
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This text has been up to date from its unique publication date of September 4, 2019.
This isn’t meant as authorized recommendation; for extra data, please click on right here.
