Minimum Wages for Tipped Employees

January 1, 2005 

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The following seven states, not included in table, do not have State minimum wage laws: Alabama, Arizona, Florida, Louisiana , Mississippi, South Carolina, and Tennessee. Also not included is Georgia, which exempts tipped employee from its law.

Some states set sub-minimum rates for minors and/or students or exempt them from coverage, or have a training wage for new hires. Such differential provisions are not displayed in this table.

FOOTNOTES 

1 Other additional deductions are permitted, for example for meals and lodging, except as noted in footnote 8 .

2 Minnesota . A large employer is an enterprise with annual receipts of $500,000 or more; a small employer, less than $500,000.

3 Oregon . Beginning January 1, 2004, and annually thereafter, the rate will be adjusted for inflation by a calculation using the U.S. City Average Consumer Price Index for All Urban Consumers for All Items. The wage amount established will be rounded to the nearest five cents.

4 Washington . Beginning January 1, 2001, and annually thereafter, the rate will be adjusted for inflation by a calculation using the Consumer Price Index for urban wage earners and clerical workers for the prior year.

5 New Mexico . The minimum rate for non-tipped employees is $5.15 per hour.

6 Puerto Rico . Rates are established by industry wage orders (mandatory decrees) and vary by industry, occupation or other factors. However, for employers not covered by the FLSA, a new minimum rate equivalent to 70% of the Federal minimum wage ($3.61 of $5.15 per hour) supersedes all mandatory decree rates below that level, with the mandatory decree program being eventually phased out. A tip credit allowance is permitted in, 1) the restaurant, bar and soda fountain industry, which has a $3.70 minimum wage for all employees, and 2) the guest house industry, with a minimum of $2.75, but only for those employees who were hired after July 27, 1998. In addition, a lower rate is established for tipped occupations than for non-tipped in the hotel industry. For hotel waiters and bellboys, the minimum wage is $2.50 or $2.25, depending on whether annual gross income is $362,500 for more or less than this amount.

7 In New Jersey , Oklahoma , and South Dakota , the listed maximum credit is the total amount allowable for tips, food and lodging combined, not for tips alone as in other states.

In New Jersey , in specific situations where the employer can prove to the satisfaction of the Labor Department that the tips actually received exceed the creditable amount, a higher tip credit may be taken.

8 North Carolina . Tip credit is not permitted unless the employer obtains from each employee, monthly or for each pay period, a signed certification of the amount of tips received.

9 Ohio . The minimum cash wage for tipped employees of employers with gross annual sales of $500,000 or less is $2.01 per hour. For non-tipped employees of such employers, the minimum rates are $3.35 for employers with sales from $150,000 to $500,000 and $2.80 with sales under $150.000.

10 Oklahoma . For employers with fewer than 10 full-time employees at any one location who have gross annual sales of $100,000 or less, the basic minimum rate is $2.00 per hour, with a 50% maximum tip credit.

11 Wisconsin . $2.13 per hour may be paid to employees who are not yet 20 years old and who have been in employment status with a particular employer for 90 or fewer consecutive calendar days from the date of initial employment.

Prepared By : 

Division of External Affairs 
Wage and Hour Division 
Employment Standards Administration 
U.S. Department of Labor 

This document was last revised in December 2004; unless otherwise stated, the information reflects requirements that were in effect, or would take effect, as of January 1, 2005.