“Tipped Employees” Regulations

"Tipped employees" refer to workers, such as servers and bartenders, who earn a significant portion of their income through tips. Regulations in this context ensure that these employees receive fair compensation. Employers can pay tipped employees a lower minimum wage, provided that tips make up the difference to reach the standard minimum wage. This means if tips are inadequate, the employer must cover the shortfall. Additionally, federal and state laws set rules on how tips are distributed, mandating that tips belong to the workers and preventing employers from taking a share.