New Jersey Wage and Hour Laws – Tip Credit

The Fair Labor Standards Act permits an employer to provide an employee with an hourly wage that is less than the current minimum wage if the employee receives tips.  The employees’ tips and hourly wage must equal the legal minimum wage. The Federal Law currently allows an hourly wage as low as $2.13 per hour for employees that received tips.

A new rule passed by the Department of Labor requires that the Employer provide notice to employees’ setting forth: (1) the amount of wage the employee will pay the employee, (2) the amount the employer can credit against tips received, (3) that the tip credit will no be no more than the value of tips actually received by the employee, (4) that the tip credit cannot be applied unless the employee has been informed of the tip credit provisions, and (5) all tips received by tips employees must be retained by the employee, unless there is a tipping pool amongst the staff.

April 21, 2011 – Castronovo & McKinney – Tom McKinney