Are employers allowed to pay tipped employees less than minimum wage?

In California, employers are allowed to pay tipped employees less than the minimum wage, as long as they make up the difference if tips do not bring the employee’s wages up to the minimum wage required by law. This is known as a ‘tip credit’. However, employers must pay tipped employees at least the state’s minimum wage of $11.00 per hour if they are not using the tip credit. Additionally, employers must ensure that the combined total of wages and tips earned by a tipped employee do not fall below the minimum wage. It’s important to note that tips are always the property of the employee and employers must ensure that customers are aware that tips are intended for the benefit of the tipped employee. Employers can’t require employees to share their tips or deduct any amount from their wages in order to cover tip pools or shared tips. Furthermore, employers must keep records of tips received by employees for at least three years and provide employees with a statement of their tips each pay period. Overall, while employers are allowed to pay tipped employees less than minimum wage with the tip credit, they must ensure that employees still make at least the minimum wage, and that tips are always the property of the employee. Employers must also keep detailed records of tips and provide employees with a statement of their tips each pay period.

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Are employers allowed to pay tipped employees less than minimum wage?

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