Tipped Employee Definition Change: Flexible Wage Rules for Employers
This bill revises the definition of a "tipped employee," allowing employers to pay the lower tipped minimum wage regardless of the employee's specific duties, provided the combined rate of cash wages and tips meets the standard federal minimum wage. This change removes the focus on the employee's occupation and gives employers flexibility in determining the calculation period, which can range from one day up to one month.
Key points
Employers gain flexibility to classify more workers as "tipped employees," even if they perform non-tipped duties, as long as total compensation meets the minimum wage.
The requirement that an employee must "customarily and regularly" receive tips is replaced by a focus on total earnings meeting the standard minimum wage.
Employers can choose a calculation period (daily, weekly, bi-weekly, or monthly) to ensure the minimum wage threshold is met.
Expired
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