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Apply the Minimum Wage Tip Credit
Key Points
Employers of employees such as wait staff, bartenders and bellhops who customarily and regularly receive tips may apply those tips as a credit against their minimum wage obligations under the Fair Labor Standards Act (FLSA) and under many state laws. However, certain states prohibit this practice.
Before applying the tip credit, employers must notify employees about how the tip credit works.
Employers that take advantage of the tip credit must also fulfill additional recordkeeping requirements.
This resource is kept under review and updated in line with developments.
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