Tip Credit
Counting a portion of tips toward the minimum wage a tipped employee must be paid.
A tip credit lets an employer count some of an employee's tips toward meeting the minimum wage, paying a lower direct cash wage as long as tips make up the difference. Federal law sets a floor, but states vary widely and several allow no tip credit at all, requiring full minimum wage before tips. If tips fall short in a given period the employer must make up the difference. Because the rules are state-specific and change, confirm your current position with your own counsel. This is not legal advice.
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