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Changes to Tipped Employee Definition and Wage Calculation

This act revises how a "tipped employee" is defined, making it easier for employers to determine who qualifies for a tipped wage. The new rules allow for more flexibility in how tips are calculated against the minimum wage, potentially affecting how employees are paid. Employers will also have more options for setting tip calculation periods.
Key points
The definition of a tipped employee will be updated to be more flexible, regardless of specific job duties.
An employee will be considered tipped if their tips and cash wages, combined with the required minimum cash wage, meet or exceed the standard minimum wage.
Employers can choose various periods (daily, weekly, monthly) for calculating tips, which may impact pay frequency.
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Additional Information
Print number: 117_S_5241
Sponsor: Sen. Braun, Mike [R-IN]
Process start date: 2022-12-13