The minimum wage for tipped workers is an important topic that affects millions of workers in the United States. The federal government requires employers to pay a minimum wage of $7.25 per hour. However, for tipped workers, employers can pay as little as $2.13 per hour, as long as the employee earns enough in tips to make up the difference. To calculate the minimum wage for tipped workers, there are several factors to consider, including the federal minimum wage, state minimum wage laws, and the amount of tips an employee earns.
Calculate the Minimum Wage for Tipped Workers
The first step in calculating the minimum wage for tipped workers is to determine the federal minimum wage. As previously mentioned, the federal government requires employers to pay at least $7.25 per hour. However, for tipped workers, employers can pay a lower minimum wage of $2.13 per hour, as long as the employee earns enough in tips to make up the difference. If the employee does not earn enough in tips, the employer is legally required to make up the difference.
The second step in calculating the minimum wage for tipped workers is to determine the state minimum wage laws. Some states have higher minimum wage rates, which means employers must pay tipped workers a higher minimum wage. For example, the minimum wage for tipped workers in California is $13.00 per hour, which is significantly higher than the federal minimum wage. Employers in California must pay tipped workers at least $13.00 per hour or make up the difference if employees do not earn enough in tips.
The third step in calculating the minimum wage for tipped workers is to consider the amount of tips an employee earns. Employers must keep accurate records of the tips their employees earn, and they must ensure that those tips combined with the base pay equals at least the federal minimum wage. For example, if an employee works for 20 hours and earns $40 in tips, the employer can pay them the $2.13 per hour minimum wage, but they must also add the $40 in tips to the employee’s earnings, which equals $87.40. This means the employer has met the minimum wage requirement.
The fourth step in calculating the minimum wage for tipped workers is to monitor tip sharing policies. Some employers require tipped workers to share their tips with other employees, such as servers, hostesses, and bartenders. While this is legal under federal law, there are restrictions on which employees can share in tips. Employers must ensure that their tip sharing policies are compliant with federal and state laws.
The final step in calculating the minimum wage for tipped workers is to stay up-to-date with changes in wage laws. Minimum wage laws can change over time, and it’s important for employers and employees to be aware of these changes.