Tipped Employees and FLSA

The Fair Labor Standards Act (FLSA) regulates the wages earned by tipped employees. Tipped employees include waiters, waitresses, busboys, bartenders, bellhops, valets and other service positions. They regularly receive more than $30 a month in tips. Tips are considered the property of the employee even though tip pooling is permitted.

Tip Credit

Tips received by any employee usually exceed the wages that are paid by the employer such as a restaurant or hotel. There is no question tips vary among employees, shifts, seasons and other variables. Even though employers must pay a minimum wage to tipped employees, the employers may use a tip credit.

Under the FLSA, tipped employees like waiters and waitresses are entitled to an employer-paid wage of at least $2.13 per hour, more if tips received do not total $5.12 an hour (based on the current minimum wage of $7.25). This means employers can claim what is called a “tip credit” of up to $5.12 against the federal minimum wage, as outlined by section 3(m) of the FLSA. Remember, Florida laws like most other states have different wage requirements than the federal Fair Labor Standards Act as seen below:


An employer who chooses to use the tip credit provision must inform the employee in advance and must be able to show that the employee receives at least the minimum wage when direct wages and the tip credit allowance are combined. Employees must retain all of their tips, except if the tipped employees participate in a  valid tip pooling arrangement.

Tip Pooling

Tip pooling among those service employees who regularly receive tips is allowed by the FLSA.  For example, waiters may share or pool their tips with a bartender. However, tip pools cannot include employees who usually do not receive tips like a dishwasher or cook in a restaurant. They also cannot share their tips with management or with the employer. If this occurs the tip credit will be destroyed and an employer will have to pay back those who shared their tips with the wrong individuals.

Side Work and Dual Jobs

Under the FLSA, employees must be paid at least $7.25 per hour when doing side work that is not incidental to a server’s tipped duties like bathroom cleaning and food preparation. FLSA also allows employers to use the tip credit for an employee’s time doing some related tasks like folding napkins or cleaning tables if they are a server. However, an employer must not  use a tip credit when the tipped employee spends more than 20 percent of their time performing related duties that do not generate tips.

If you believe you have not been paid the minimum wage call Marrero & Wydler at (305) 446-5528. Our attorneys are experienced wage lawyers that can help.