The Treatment of Tips under the FLSA

Over the next two week we'll be posting a multi-part series on the treatment of tips under the Fair Labor Standards Act.  First, an introduction:

Generally, the FLSA requires employers to pay a minimum wage of $7.25 per hour.  29 U.S.C. § 206(A)(i)(c). The FLSA permits employers to pay a so-called “direct wage” of $2.13 per hour to employees who are considered “tipped employees” (29 U.S.C. § 203(m)), so long as employees earns sufficient tips to meet the $7.25 per hour minimum wage requirement. Where tips do not make up the difference, the employer must supplement so the employee receives no less than the full minimum wage for all hours worked.

Our postings will address the following key topics relating to tips and the FLSA:

1.      Tip credits

2.      What constitutes a tip?

3.      Which employees are “tipped employees”?

4.      Dual employment

5.      Employer deductions from tip credits

6.      Notice requirements for use of tip credits

7.      Tip pooling

8.      Importance of State Law

9.      Taxes

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