What is the minimum wage for tipped workers?

In Tennessee, the minimum wage for tipped employees is the same as the minimum wage for non-tipped employees, which is $7.25 per hour. The tipped minimum wage is somewhat complicated in Tennessee because the employer is allowed to take a “tip credit” against the regular minimum wage rate. So, in effect, the minimum wage for tipped employees is $7.25 per hour, but employers are allowed to pay a lower rate as long as the employee makes enough tips to make up the difference. The minimum rate may not be lower than $2.13 per hour. Additionally, tips cannot be used to supplement the employer’s contribution to the employer’s portion of taxes. Employers must also make sure that the average hourly wage for tipped employees, including tips, must be at least the minimum wage for all employees. Employers are required to maintain records of tips and wages paid to tipped employees. To take advantage of the tip credit, employers in Tennessee must ensure that each tipped employee is: (1) informed that the tip credit will be taken; (2) informed that the employee must receive an hourly rate of at least $2.13; and (3) informed that tips received must be the employee’s sole compensation, except for medical or disability insurance premiums paid by the employer. To summarize, the minimum wage for tipped employees in Tennessee is $7.25 per hour, but employers may take a “tip credit” to reduce that rate as long as the employee’s hourly wage, including tips, is at least the minimum wage. Employers must also inform their employees of the tip credit and ensure that tips are the employee’s sole compensation.

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What is the minimum wage for tipped workers?

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