What is the federal minimum wage for tipped employees?

What is the federal minimum wage for tipped employees?

• A. $1.75
• B. $2.13
• C. $3.00
• D. $4.00

Answer: (B)

The federal minimum wage for tipped employees is indeed $2.13 per hour. This amount has been established under the Fair Labor Standards Act (FLSA) and reflects a special provision for those who earn tips as a significant portion of their income. Employers are allowed to pay this lower cash wage to tipped employees, as long as the combination of the tips received and this cash wage meets or exceeds the federal minimum wage of $7.25 per hour. If the employee's tips combined with the cash wage do not reach this minimum wage, the employer is obligated to make up the difference. It's important to note the distinction between the tipped minimum wage and the general minimum wage. The tipped minimum wage reflects the understanding that service positions, such as waitstaff or bartenders, are supplemented significantly by customer tips, thereby allowing for a lower base pay as part of their compensation structure. This system has been debated and varies across states, where some may set higher minimum wages for tipped employees.

The federal minimum wage for tipped employees is indeed $2.13 per hour. This amount has been established under the Fair Labor Standards Act (FLSA) and reflects a special provision for those who earn tips as a significant portion of their income.

Employers are allowed to pay this lower cash wage to tipped employees, as long as the combination of the tips received and this cash wage meets or exceeds the federal minimum wage of $7.25 per hour. If the employee's tips combined with the cash wage do not reach this minimum wage, the employer is obligated to make up the difference.

It's important to note the distinction between the tipped minimum wage and the general minimum wage. The tipped minimum wage reflects the understanding that service positions, such as waitstaff or bartenders, are supplemented significantly by customer tips, thereby allowing for a lower base pay as part of their compensation structure. This system has been debated and varies across states, where some may set higher minimum wages for tipped employees.