Apply the Minimum Wage Tip Credit
- 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.