Minimum wage laws apply to all workers, including tipped employees. However, the rules for tipped workers differ from those for non-tipped employees. Employers are legally obligated to ensure that tipped workers earn at least the minimum wage applicable in their state or under federal law. If tips do not bring an employee’s total hourly earnings to meet or exceed the minimum wage, the employer must make up the difference.
Under federal law, the base cash wage for tipped employees is currently $2.13 per hour. This assumes that tips will raise their total earnings to meet or exceed the federal minimum wage of $7.25 per hour. However, many states have enacted laws requiring higher base wages for tipped employees or eliminating the tip credit system altogether, ensuring that tipped workers receive the full state minimum wage before tips.
Despite these protections, wage theft is a persistent issue for tipped employees. According to the Economic Policy Institute, wage violations amount to approximately $15 billion annually, leaving millions of American workers—including tipped employees—underpaid and vulnerable.
Tipped workers often face challenges such as being required to share tips with non-tipped staff, working off the clock, or being denied the difference when their tips fall short of the minimum wage. These practices are not only unethical but also illegal.
If you are a tipped employee and believe your employer is underpaying you or violating wage laws, you have rights. At 770GoodLaw, we are committed to protecting workers and holding employers accountable. Contact us today for a free case review, and let us help you reclaim the wages and tips you rightfully deserve.