In determining compliance with the wage payment requirements of the
Act, under the provisions of section 3(m) the amount paid to a tipped
employee by an employer is deemed to be increased on account of tips by
an amount which cannot exceed 50 percent of the minimum wage applicable
to such employee in the workweek for which the wage payment is made.
This credit is in addition to any credit for board, lodging, or other
facilities which may be allowable under section 3(m). The credit allowed
on account of tips may be less than 50 percent of the applicable minimum
wage; it cannot be more. The actual amount is left by the statute to
determination by the employer on the basis of his information concerning
the tipping practices and receipts in his establishment. However,
section 3(m) provides that an employee who can show to the satisfaction
of the Secretary of Labor that the actual amount of tips received by him
was less than the amount determined by the employer as a tip credit
shall receive an appropriate wage adjustment. See Sec. 531.50(a). As
stated in Senate Report No. 1487 (89th Cong. 2d sess.), it is presumed
that in the application of this special provision the employee will be
receiving at least the maximum tip credit in actual tips: ``If the
employee is receiving less than the amount credited, the employer is
required to pay the balance so that the employee receives at least the
minimum wage with the defined combination of wages and tips.'' Provision
is made in Sec. 531.7 for employee requests for review of tip credit
determinations made by employers, in the event that the employee
considers that the tip credit taken exceeds his actual tips. As
indicated in Sec. 531.51, the tip credit may be taken only for hours
worked by the employee in an occupation in which he qualifies as a
``tipped employee.'' Under employment agreements requiring tips to be
turned over or credited to the employer to be treated by him as part of
his gross receipts, it is clear from the legislative history that the
employer must pay the employee the full minimum hourly wage, since for
all practical purposes the employee is not receiving tip income. See
also Sec. 531.54.
