Q: What Are Tipped Employees?

According to the US Department of Labor, a tipped employee is any employee who makes more than $30 in tips each month. “Tipped Employees” can include waitstaff, movers, bartenders, bellhops, and anyone else who regularly receives tips as part of their job.

Why is it important to know who your tipped employees are?

Per the federal Fair Labor Standards Act (FLSA), tipped employees can be paid less than minimum wage per hour if their tips make up the difference.

The difference between the hourly minimum wage and the hourly rate you pay tipped employees is called a  “Tip Credit” and claiming a tip credit can save your business some serious money in wages every payday.

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