Employers must provide a tip credit notice before they take a tip credit. If you have any questions, contact our Ohio Wage and Hour Lawyer today!
What is a tip credit?
The easiest way to explain a tip credit is by providing an example. As of the writing of this blog, the minimum wage in Ohio is $8.10 per hour for non-tipped employees. If an employer wishes to pay a tipped employee less than $8.10 per hour, it may do so, but only if it follows the requirements for doing so. Pursuant to Section 3(m) of the FLSA, an employer may take a tip credit towards the minimum wage requirement – the maximum tip credit permissible under the FLSA is $5.12 per hour because employers may pay tipped employees no less than $2.13 per hour and that is $5.12 per hour less than the federal minimum wage.
However, minimum wage in Ohio is $8.10 per hour and the minimum an employer must pay a tipped employee is $4.05 per hour in Ohio. If you are a tipped employee and you are making less than $2.13 per hour or $4.05 per hour, then you may have violations of the FLSA or Ohio’s minimum wage law.
Before employers can take a tip credit, they must provide a tip credit notice. What are the requirements of a tipped credit notice.
Employers may only take a tip credit if they provide a proper notice prior to taking the tip credit. The tip credit notice must be provided BEFORE the employer takes the tip credit. Here are the requirements for a proper tip credit notice:
- the amount of cash wage paid to the employee, i.e. at least $2.13 per hour or $4.05 per hour in Ohio;
- the amount claimed by the employer as a tip credit;
- that the tip credit claimed by the employer cannot exceed the amount of tips actually received by the tipped employee;
- that all tips received by the tipped employee are to be retained by the employee except for valid tip pooling arrangements limited to employee who customarily and regularly receive tips; and
- that the tip credit will not apply to any tipped employee unless the employee has been informed of these tip credit provisions.
Employers may provide oral or written notice of the tip credit provisions set forth above. However, an employer who fails to provide the required information CANNOT use the tip credit. Consequently, if an employer does not provide proper tip credit notice, but they still take the tip credit, then they are in violation of federal and state laws. Employees who do not receive proper tip credit notice are entitled to full minimum wage for all of their hours worked.
Contact our office for a FREE consultation with an Ohio Wage and Hour Lawyer if you have questions about tip credit, tip pooling, or your compensation.
If you are a tipped employee and your employer:
- is paying you less than $2.13 per hour (or $4.05 per hour in Ohio), then you should contact our office;
- has not provided you a tip credit notice, then you should contact our office;
- is pooling your tips with other non-tipped employees, then you should contact our office.
We are here to help you with any issues related to your compensation. Please feel free to contact our office today to speak with an Ohio Wage and Hour Lawyer about tip credit issues, overtime issues, tip pooling issues, or any other questions you have about your wages. You may contact our office for a FREE consultation with an Ohio Wage and Hour Lawyer by filling out the information below or calling 1-614-949-1181.