Employment Law

Employee Compensation

What about employees receiving tips and how they are treated under FLSA?

Tipped employees are those who regularly earn more $30 per month in tips. Under the FLSA, employers only need to guarantee $2.13 per hour to tipped employees. If the employee’s tips and $2.13 per hour do not add up to the minimum wage under FLSA, then the employer must make up the difference. For more information on tipping and FLSA, see the Department of Labor’s Fact Sheet on the subject at

Much litigation currently occurs in American courts regarding tipped employees. Much of the litigation centers on the legality of various tipping pool arrangements that force tipped employees to share their tips with other workers, including some who do not deal directly with customers. In some cases, the courts have ruled that such tip sharing agreements violate the FLSA.


This is a web preview of the "The Handy Law Answer Book" app. Many features only work on your mobile device. If you like what you see, we hope you will consider buying. Get the App