Are employers allowed to pay tipped and non-tipped employees different wages?

In the state of Florida, employers are allowed to pay tipped and non-tipped employees different wages. This is known as the tip credit system. According to the Fair Labor Standards Act, employers are allowed by law to pay tipped employees a sub-minimum wage which is lower than the standard minimum wage set by the state of Florida. The tip credit system works by permitting the employer to pay a reduced hourly rate to tipped employees. This reduced rate must be no greater than the difference between the minimum wage and the tip amount. For example, if the minimum wage for the state of Florida is $8.65, and the employee is receiving tips, the employer can legally pay the employee a lower hourly rate as long as it does not exceed the difference between the minimum wage and the employee’s tips. In other words, the employer could legally pay the employee a wage of $6.15 per hour if the employee is making $2.50 per hour in tips. Additionally, employers are required to make up the difference should the employee’s tips not be sufficient to cover the difference between the full minimum wage and the reduced rate.

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Are employers allowed to pay tipped and non-tipped employees different wages?

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