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If you work in a job where you "customarily and regularly" make more than $30 per month in tips, then under federal law you are considered a tipped employee and subject to special laws on minimum wage and overtime pay. Many states also have special laws for tipped employees, and some may have different standards for qualification as a tipped employee than the federal standard.
2. Who is covered by the laws on tipped employees?More than a hundred million American workers are protected (or "covered") by the FLSA.
There are two ways in which an employee can be covered: "enterprise coverage" and "individual coverage." Either standard is sufficient for you to be covered and entitled to receive the minimum wage.
Enterprise coverage: Employees who work for certain businesses or organizations (or "enterprises") are covered by the FLSA. These enterprises, which must have at least two employees, are:
Individual coverage: Even when there is no enterprise coverage, employees are protected by the FLSA if their work regularly involves them in commerce between states ("interstate commerce"). In its own words, the law covers individual workers who are "engaged in commerce or in the production of goods for commerce."
Domestic service workers (such as housekeepers, full-time babysitters, chauffeurs and cooks) are normally covered by the law, as long as:
Yes, under certain circumstances. Under federal law, an employer of a tipped employee is only required to pay $2.13 per hour in direct wages if that amount combined with the tips received at least equals the federal minimum wage. If your tips combined with the employer's direct wages of at least $2.13 per hour do not equal the federal minimum hourly wage, the employer must make up the difference. Many states, however, require higher direct wage amounts for tipped employees, or calculate the offset differently.
In order to take advantage of the tip offset provision under federal law, your employer must:
"When you tip, you think you’re giving them something extra, but you’re subsidizing a multimillion-dollar industry (in reference to states where the wage is $2.13; California is not one of them). It epitomizes the dangerous future this country is heading toward with growing income inequity and unbridled power on the part of corporations. People generally know there’s inequality, but they don’t understand the scale of it. It’s not just low wage – it’s no wage after taxes, and it comes out of Jim Crow."
–Saru Jayaraman | Director of Food Labor Research Center at the University of California, Berkeley | Co-founder and President of the Restaurant Opportunities Centers United | Co-founder of One Fair Wage
from Economic Policy Institute