Tipped employees are those who customarily and regularly receive
more than $30 a month in tips. The employer may consider tips
as part of wages, but the employer must pay at least $2.13 an
hour in direct wages.
The employer who elects to use the tip credit provision, must
inform the employee in advance and must be able to show that
the employee receives at least the minimum wage when direct
wages and the tip credit allowance are combined. If an employee's
tips combined with the employer's direct wages of at least $2.13
an hour do not equal the minimum hourly wage, the employer must
make up the difference. Also, employees must retain all of their
tips, except to the extent that they participate in a valid
tip pooling or sharing arrangement.