By U.S. federal law, the minimum wage requirement does not n

by U.S. federal law, the minimum wage requirement does not necessarily include tips unless specific conditions are met. Here's how it works:

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Federal Law (Fair Labor Standards Act - FLSA):

• The federal minimum wage is $7.25/hour.

• For tipped employees, employers can pay a lower "cash wage" of $2.13/hour if:

  • The employee earns at least $30/month in tips, and

  • The employee's tips + cash wage = at least $7.25/hour.

• If total earnings (wage + tips) do not equal $7.25/hour, the employer must make up the difference.

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? State Laws May Differ:

• Many states set higher minimum wages and have stricter rules.

  • Some states (like California, Oregon, Washington) do not allow tip credits at all — employers must pay the full state minimum wage before tips.

  • Others (like Texas or Georgia) follow the federal standard.

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Example:

• A restaurant server in Texas earns:

  • $2.13/hour (cash wage)

  • $5.50/hour in tips (on average)

  • Total = $7.63/hour → Meets federal minimum

If they only made $4 in tips/hour, employer must add $1.12 to meet $7.25 → Otherwise, it’s a wage violation.