Skip to main content
Monday, June 9, 2025
Home
Omaha Daily Record
  • Login
  • Home
  • Subscribe
  • Calendar
    • Real Estate
    • Small Business
    • Non-Profit
    • Political
    • Legal
  • Podcasts
    • Real Estate
    • Small Business
    • Non-Profit
    • Political
    • Legal
  • Profiles
    • Real Estate
    • Small Business
    • Non-Profit
    • Political
    • Legal
  • E-Edition
    • Current Issue
    • Archives
  • Real Estate News
    • Market Trends
  • Business News
  • Non-Profit News
  • Political News
  • Legal News
  • Editorial
    • Empower You
    • The Serial Entrepreneur
    • Tom Becka
  • Other News
  • Public Records
    • Wreck Permits
    • Building Permits
    • Electrical Permits
    • Mechanical Permits
    • Plumbing Permits
  • Real Estate Leads
    • Notice of Default
    • Active Property Sales
    • Active Probates
    • Deeds
  • Public Notices
    • State of Nebraska
    • City of Bennington
    • City of Gretna
    • City of Valley
    • Douglas County West Community Schools
    • Gretna Public Schools
    • Omaha Airport Authority
    • Omaha Housing Authority
    • Plattsmouth Community Schools
    • City of Omaha
    • Douglas County
      • Tax Delinqueny 2025
    • City/County Notice of Bids
    • City of Ralston
    • Omaha Public Schools
    • Millard Public Schools
    • Ralston Public Schools
    • Westside Community Schools
    • Bennington Public Schools
    • Learning Community
    • MAPA
    • MECA
    • Omaha Airport Authority
    • Village of Boys Town
    • Village of Waterloo
    • Sarpy County
      • Tax Delinquency 2025
    • City of Bellevue
  • Advertise
    • Place a Legal Notice
    • Place a Print Ad
    • Place a Classified Ad
    • Place an Online Ad
    • Place Sponsored Content
  • Available For Hire
    • Real Estate
      • Contractors
      • Clerical
    • Legal
      • Paralegal
      • Clerical
  • About
    • Our History
    • Our Office
    • Our Staff
    • Contact Us

You are here

Home » The Varied Landscape Of Minimum Wages And Tip Credits In The U.S.

The Varied Landscape Of Minimum Wages And Tip Credits In The U.S.

Published by josie@omahadail... on Tue, 11/28/2023 - 5:00am

A bartender pours a beer at McMenamin’s Tavern in Philadelphia, Thursday, Feb. 9, 2023. (Matt Rourke / AP Photo)
By 
Drew DeSilver
Pew Research Center

While service quality is the main driver of Americans’ tipping decisions, about three-in-ten U.S. adults also cite workers’ pay before tips as a major factor they consider, according to a recent Pew Research Center survey. But just how much that is can vary widely, because of the interplay of state and federal rules on minimum wages and tips.

Under federal law, the minimum wage for most workers is $7.25 an hour. However, employers of workers who “customarily and regularly” receive at least $30 a month in tips can pay those workers just $2.13 an hour in direct wages, as long as they also receive the equivalent of at least $5.12 an hour in tips. That way, their full pay at least equals the $7.25 minimum. That $5.12 is called the “tip credit,” and if an employee does not earn at least that much in tips, the employer must make up the difference.

In 14 states, the federal rules are the last, or almost-last, word on minimum wages for tipped workers. (Oklahoma has slightly different rules for very small businesses.) But the federal law is a floor, not a ceiling, and states are free to set their own, higher minimum wages and tip credit rules.

The result is a patchwork system where, for example, a restaurant server in Waukegan, Illinois, is entitled to a $13 minimum wage – $7.80 in direct wages from the restaurant, plus a $5.20 tip credit. But for a server 17 miles away in Kenosha, Wisconsin, the minimum is $7.25 – with $2.33 in direct wages from the restaurant, plus a $4.92 tip credit.

Thirty states and the District of Columbia currently have minimum wages that are higher than the federal standard, ranging from $8.75 an hour in West Virginia to $17 an hour in D.C. In 17 of those states and D.C., the tip credit also is higher: Virginia’s minimum wage, for example, is $12 an hour, but employers can use tips to offset up to $9.87. That means the minimum cash wage payable by the employer, $2.13, is the same as under federal law.

Six states not only have higher hourly minimums but lower tip credits than the federal standard. In Arizona, for instance, the minimum wage is $13.85, but employers can use tips to offset just $3 of that amount. And six other states use the federal minimum wage of $7.25 but have smaller tip credits than federal law authorizes.

Seven states – most of them in the West and all with higher state minimum wages than the federal one – don’t allow tip credits at all. That means tipped workers are paid the full minimum wage from their employers and can keep tips on top of that.

Editor’s Note: The current minimum wage in Nebraska is $10.50 and will be raised on January 1, 2024 to $12.00. This article was produced by Pew Research Center, an initiative of the Pew Charitable Trusts. More stories from Pew Research Center can be found at www.pewresearch.org.

Category:

  • Business News

User login

  • Request new password

            

Latest Podcasts

  • Real Estate
  • Political
  • Political
  • Real Estate

Nebraska Landlord

Betches Sup - A Liberal News Commentary

Ruthless - A Conservative News Commentary

REIA Radio Show

Omaha Daily Record

The Daily Record
222 South 72nd Street, Suite 302
Omaha, Nebraska
68114
United States

Tele (402) 345-1303
Fax (402) 345-2351
 

The Daily Record
222 South 72nd Street, Suite 302 | Omaha, Nebraska 68114 | United States | Tele (402) 345-1303 | Fax (402) 345-2351 | Sitemap
Site Design, Programming & Development by Surf New Media