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

In Indiana, employers are allowed to pay tipped employees less than the standard minimum wage. However, the employer must pay the tipped employee the difference between the tipped minimum wage and the standard minimum wage if the employee does not make enough in tips to equal the standard minimum wage. The tipped minimum wage in Indiana is $2.13 per hour. However, employers must also factor in the total of the tipped employee’s tips plus the amount the employer pays in order to meet the standard minimum wage. This means that if the employer pays $2.13 per hour and the employee only makes $2.00 per hour in tips, the employer must pay the employee the difference between $2.13 and $4.25 (the standard minimum wage in Indiana), which is $2.12. In addition, employers must abide by the law regarding tip pools. Tip pools allow tipped employees to share tips according to agreement with other employees who also receive tips, such as waiters, busboys, and bartenders. However, employers cannot require employees to participate in tip pools and employers cannot take a share of the tips. Overall, employers in Indiana are allowed to pay tipped employees less than the standard minimum wage. They must pay the difference between the tipped minimum wage and the standard minimum wage if the employee does not make enough in tips to equal the standard minimum wage and they must abide by the law regarding tip pools.

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

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