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

In Virginia, employers are allowed to pay tipped employees less than minimum wage, as long as certain conditions are met. The federal minimum wage for tipped employees is currently $2.13/hour plus tips. However, this only applies if the employee’s total wages plus tips equal at least the federal minimum wage. If not, the employer must make up the difference. In Virginia, employers may also pay tipped employees less than the state minimum wage. This is known as a “tip credit” and is based on the amount the employee earns in tips. To qualify for a tip credit, employers must pay a cash wage of at least $2.13/hour, as well as providing a weekly statement to the employee showing their total hours worked, wages paid, and total tips received. Once these requirements are met, employers may take a credit of up to 50% of the state minimum wage, up to a maximum of $5.00/hour. Regardless of the amount paid to tipped employees, employers must ensure their workers meet the minimum wage law. If their wages plus tips do not total at least the minimum wage, the employer must pay the difference. Employers should also be aware that wages cannot be reduced due to customer tips. All wages must be paid directly to the employee.

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

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