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Are there special rules for tipped employees?

employees rules special tipped
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Are there special rules for tipped employees?

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Congress has enacted a special exception to the rules for computing the minimum wage for tipped employees. An employer is permitted to pay tipped employees a “cash wage” of only one-half the 1996 minimum wage ($4.25/hour). This means employers can pay tipped employees a cash wage of only $2.12 an hour, and it may credit tips to make up the rest of the minimum wage. The tip credit the employer receives may not exceed the value of the tips the employee has actually received. If this amount fails to meet the minimum wage, the employer must make up the difference. Employers may apply the tip credit only if: (A) The employee is working in a job in which the employee customarily and regularly receives $30.00 a month in tips; (B) The tipped employee has been informed by the employer about the tip credit law and that the employee must be allowed to retain all tips the employee receives, with the exception that tip pooling with other employees arrangements are allowed; and (C) Employers cannot

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