FSLA Tip Credit and Minimum Wage for Servers

Why the boss can’t take money out of your check that is not for normal taxes and withholdings.

If you’re a server at a restaurant, you need to know about the so-call “tip Credit” of Section 3(m) of the FLSA. That law allows an employer to take a tip credit toward its minimum wage obligation for your pay, which is equal to the difference between the required cash wage (which must be at least $2.13) and the federal minimum wage.

What most people do NOT know is that if your boss takes any money out of your paycheck (for breaking a dish, fining you, etc.), he puts you below minimum wage, and you can sue them, regardless of how much money you made in tips.

Thus, the maximum tip credit that an employer can currently claim under the FLSA section 3(m) is $5.12 per hour (the minimum wage of $7.25 minus the minimum required cash wage of $2.13). Under certain circumstances, an employer may be able to claim an additional overtime tip credit against its overtime obligations.

Remember, all the tips that you get do NOT go to your minimum wage. So, if the boss takes any money out of your check that is not for normal taxes and withholdings, he’s technically put you below the minimum wage, even if you make $3,000 in tips during that pay period.

Strange, but true. Call if you have any questions. 801-651-1512.

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