There’s technically two different rates employers are federally required to pay. First there’s the standard $7.25/h. The second is for workers that receive cash tips. Employers are allowed to pay said workers as little as $2.13/h so long as their tips and their regular wages work out to $7.25h. If the employee’s gross pay works out to less than $7.25/h, then the employer is obligated to make up the difference. The idea, I presume, is to allow some wiggle room to “encourage a more competitive market for smaller businesses,” while still ensuring workers make at least the minimum.
To be real clear, the only thing this does is screw over the hourly employees trying to survive on tips.
It does absolutely nothing to the business, they don’t care, at all. It doesn’t impact them in the slightest.
Yes, by law, if someone makes so little in tips that they would be getting paid below minimum wage the business is supposed to make up the difference.
Assuming that happens for the entire shift.
In practice, by all accounts… That pretty much never happens.
Wait so they get paid less than the minimum wage? What’s the point of minimum wage if they have to make up for it with tips?
No point. It is purely symbolic.
Yes. One of the many reasons I say we need a UBI.
There’s technically two different rates employers are federally required to pay. First there’s the standard $7.25/h. The second is for workers that receive cash tips. Employers are allowed to pay said workers as little as $2.13/h so long as their tips and their regular wages work out to $7.25h. If the employee’s gross pay works out to less than $7.25/h, then the employer is obligated to make up the difference. The idea, I presume, is to allow some wiggle room to “encourage a more competitive market for smaller businesses,” while still ensuring workers make at least the minimum.
Fucking braindead…
People are generalizing, but this isn’t the case for all of the US. Things vary by state
In practice, if you report so little tips you cant hit minimum wage management will assume you are (a) lying to the IRS, (b) providing awful service, or © business is too slow to justify you being there. Any way you look at you probably wont work there much longer.