What if I am a Tipped Employee?

Q. What if I am a Tipped Employee?

A. If an employer elects to use the tip credit provision, it must inform the employee in advance and must be able to show that the employee receives at least the minimum wage when direct wages and the tip credit allowance are combined. If an employee’s tips combined with the employer’s direct wages do not equal the minimum hourly wage, the employer must make up the difference.

Employees must retain all of their tips, except to the extent that they participate in a valid tip pooling or sharing arrangement. A tip pool can often be invalidated if tips are shared with managers, dishwashers, cooks, chefs orothers who are not entitled to share in tips.

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