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Take, for example, a grocery store worker who makes $30,000 annually and a restaurant server making $10,000 in hourly wages and $20,000 in tips. Despite making the same amount of money, the ...
The tipped wage is base wage paid to an employee in the United States who receives a substantial portion of their compensation from tips.According to a common labor law provision referred to as a "tip credit", the employee must earn at least the state's minimum wage when tips and wages are combined or the employer is required to increase the wage to fulfill that threshold.
Because the expectation is that tipped workers will make more through tips, they legally only need to make $2.13 an hour in the U.S, according to the U.S. Department of Labor.
Although there is a federal minimum wage, it has been restricted in (1) the scope of who it covers, (2) the time that counts to calculate the hourly minimum wage, and (3) the amount that employers' can take from their employees' tips or deduct for expenses. First, five US Supreme Court judges held in Alden v.
Federal law permits employers to include tips towards satisfying the difference between employees' hourly wage and minimum wage. Federal minimum wage for tipped employees in the United States is $2.13 per hour, as long as the combination of tips and $2.13 hourly wage exceed the standard minimum wage of $7.25 per hour, although some states and ...
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According to the U.S. Department of Labor, tipped employees must be paid a minimum wage of $2.13 per hour by their employer, which assumes the employee will make at least $5.12 in tips per hour to ...
[19] [20] Recipients of tips in shared tip restaurants may be paid a "tip-credit wage", below the ordinary minimum wage in the United States, if the amount of shared tips in a pay period brings their average pay to the minimum wage. [18] Federal subminimum wage is set at $2.13 per hour, though state and local laws may require higher rates. [21]