Tipped Employees: Best Payment Practices and Notice Requirements

Summary

This practice note explores the tip credit, tip pools, tip credit notice requirements, and tips paid on credit cards under the Fair Labor Standards Act (FLSA). The FLSA permits employers to take a tip credit against the hourly wages paid to tipped employees. Tipped employees under the FLSA are those who customarily and regularly receive more than $30 per month in tips. See 29 U.S.C. § 203(t). For information on state tip credit / tip pooling laws, see Tip Credit and Tip Pooling State Law Survey. See also the Wage and Hour Requirements column of Wage and Hour State Practice Notes Chart.