Server Minimum Wage

September 15th, 2006 Posted by Nicole

Since 1933, the U.S. has observed very strict minimum wage laws. Over the years, there have been many changes to these laws, including the dissolution of the minimum wage, the reinstatement of the wage and many increases in the wage. Most recently, the federal government handed over power to the states to determine what the individual state minimum wages are. Each state may select to increase the minimum wage above the national wage, which is $5.15, but it may not decrease the way below the national standard.

While the minimum wage is set at $5.15, it is recognized that the server minimum wage is not exactly that high…on paper. When it comes to the server minimum wage, each state has its own wage set. That wage is generally just over $2.00, but rarely much more. This minimum wage serves as a very base salary for servers who are on the clock serving tables. If a server needs to come in during a time when he or she is not serving, then the server must be paid at least the base minimum wage for the state and locality. For example, if a server needs to come into a restaurant for a cleaning day, then the server needs to make more than he or she would normally make for base pay.

The reason that the server minimum wage is so low is simple: servers make tips. At the end of each shift, servers are required to report how much money they earned during the course of their shift. That amount must equal or exceed the minimum wage. Thus, the server minimum wage is a base rate, but the server generally makes much more than the minimum wage.

It is important to note that servers must report the full amount of their tips. Often, when tips are factored into the equation, the server minimum wage becomes a secondary source of income, as the tips tend to exceed the minimum wage by a great deal.

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Posted in Federal Minimum Wage

  1. Posted by: Evelyn

    Can my employer at the restaurant force us to sweep and mop floors, do all the dishes, clean the kitchen and various other tasks after we have been
    “cut” (not serving any more or waiting on tables) before we can go home. Sometimes this takes up to 2 hours. If we don’t do these tasks, they say we are fired. This seems wrong to me.

    Server at a restaurant in Beckley, WV

  2. Posted by: Nicole

    Hi Evelyn! That’s a complex question. For a complete answer, please post it on our sister site at http://www.laborlawtalk.com. And thanks for reading the blogs!~ Nicole

  3. Posted by: tabatha

    I got one for you, what about when you work your butt off for $2.13 an hour and your check is only $50.00 a week if you worked 40 hours and you cant even cash it, not at the bank its from, or any check cashing in your town. Or what if the restaurant you work at is one of the biggest franchises internationally and you live off your tips. But this restaurant never has everything on the menu, and especially runs out of the basics everyday, so why then is it fair to get minimum wage when that in effect is what you will make as soon as you tell a customer I’m sorry we don’t have that, and this happens everyday

  4. Posted by: Amelia

    Hi Tabatha! This is a tough situation. If the employer is issuing paychecks that are worthless, then under the law the employees are not being paid. You should contact the Wage and Hour Division of the U.S. Department of Labor, and the state department of labor, because you are not being paid the minimum wage for servers.

    Franchises are locally owned and unfortunately there is a bad apple in every bunch. It sounds like the restaurant where you work is poorly managed, which obviously affects your tips. You would certainly be justified in looking for another job. Even in a tough economy, it should not be hard to find one where you are at least paid the server’s minimum wage. For a more complete answer, please post your question on our sister site at http://www.laborlawtalk.com. HTH, and thanks for reading the blogs!~ Nicole

  5. Posted by: Barry Reed

    I’ve just started working for a new employer whose business hasn’t taken off as he expected it to quite yet. The first week I worked after opening I worked 36 hours and only made $60 in tips. Does my employer have to make up the difference between $2.13/hour and minimum wage now which is $6.55?

  6. Posted by: Amelia

    Hi Barry! Yes, the employer has to pay you — and every server — the difference between the tips you actually earned, and the federal minimum wage of $6.55 per hour.

    And, if the employer doesn’t make good on this ASAP, you should look for another job. You can also post questions on our sister site at http://www.laborlawtalk.com. HTH, and thanks for reading the blog!~ Amelia

  7. Posted by: laurel

    Hi!

    I have been waiting tables for 12 years now and I’m just wondering how “fair” it is that the server min. wage has not been increased in a REALLY long time. With the economy tanking, I’ve been reduced to working only 4 shifts a week and quite often only make $20 - $ 45 for a 6-8 hour shift despite the fact that the restaurant I work at is considered “up-scale” and is independent. Is there ever going to be a time when the min. wage is considered for an increase? I haven’t received a paycheck in years (due to claiming all of my tips) and even though on paper I made a little over $20K this past year, owing more than a grand in taxes, while understandable, is seriously gonna kill me this year. Outside of finding another line of work, which I am trying very hard to do, is there any way I can speak up for myself and my profession?

  8. Posted by: Amelia

    Hi Laurel! We will address your quesiton, but first… we have good news for you. The federal minimum wage applies to most servers, because most restaurants accept credit cards. The federal minimum wage is currently $6.55 per hour, and on July 1, 2009 it will increase to $7.25 per hour.
    Under federal law, a tipped employee can be paid just $2.13 per hour. However, the employee’s total wages — tips plus hourly rate — must average out to be at least the minimum wage for hours worked during the pay period. If it does not, the employer must make up the difference in wages.
    Suppose Amy works four 6-hour shifts this week and makes just $20 in tips on each shift. Amy is averaging $3.33 per hour in tips. She is also earning $2.13 per hour in wages, so Amy’s total hourly rate is ($3.33 + $2.13) or $5.46 per hour. That is less than the federal minimum wage of $6.55 per hour, so Amy’s employer must pay her an additional $1.09 per hour in wages on her paycheck.
    Servers should keep an accurate written record of tips received on each shift. Usually, this information is on the time card. It is the employer’s responsibility, then, to ensure that they are paying any difference between the employees earnings and the minimum wage.
    We will also add that if a tipped employee is regularly making less than the minimum wage, they would literally be better off working at the local McDonald’s. Many fast food restaurants offer flexible schedules, opportunities for promotion and healthcare benefits even to part-time workers.
    In your case, the problem is worse because you are basically working part-time at just 28 hours per week. It would be better for you to either look for a full-time job, or to find an additional part-time job, to at least get up to 40 hours per week.
    Many food servers would agree with you that the tipped minimum wage needs to increase. The only way to do that is to contact your state or federal representative in the legislature. It is worth noting that in almost half the states, under the state minimum wage tipped workers must be paid more than $2.13 per hour. In fact, at least 6 states require that tipped workers be paid the full state minimum wage. For example, in Washington state, tipped employees must be paid $8.55 per hour. HTH, and thanks for reading the blogs!~ Amelia

  9. Posted by: Leslie Mandic

    Amelia I would love to know how to find which states pay what.
    My son works in Ky and makes 2.13/hr. I know AZ & AL also pay that. When I tell my friends they are horrified as min. wage is min wage right? with the exception of the food industries dirty little secrets. Calif has had REAL min wage for food servers for I want to say 30 years now as *Tips Are Not Guaranteed* I remember that petition. I know my son called recently before Christmas as he had a really bad night and worked 6hrs and barely made I think it was $20 in tips. I told him they had to make it up. He said no it was in a pay period average. Which again is fairly s**ty if you ask me. My son is a good waiter has been in food service for 8 years since he was 14 working at a Subway. Plus he had an embarrassing mum who was a perfectionist customer, which I think geared him straight. LOL!
    He also worked at 17 as a busboy in famous hotel for breakfast. There the busboys made $6 an hour because they don’t typically get tips and do the floor mopping etc. The (exclusively female) servers were supposed to give him 10% of their tips. Which did or didn’t happen. So he really made about $9 an hour before taxes. Now he knows how to *grease* his busboys. Clean tables of course generate more customers. Even though Good nights generate him better than $10 an hour and he pays taxes to the employer, I think its crappy to not pay real min wage. ya’ll need to start a movement.
    SO I pay cash for tips when I can. If I am short I put a bit on my credit card and the rest cash. I know one is supposed to report all to the IRS of course but I think 50% in cash is the actual amount from most servers. Nowdays most don’t know all of this and tip on the card but I try to enlighten my friends and wish you all well.

    –leslie

  10. Posted by: Amelia

    Hi Leslie! The federal minimum wage for tipped employees is $2.13 per hour. That rate also applies in Alabama, where there is no state minimum wage whatsoever. It’s also $2.13 per hour in Kentucky. The minimum wage for tipped workers in Arizona is $4.09 per hour. In all of these states, if the employee does not average the minimum wage ($7.25 in Arizona, $6.55 in the other states mentioned) the employer must pay the difference in wages.
    Seven U.S. states require that tipped employees be paid the full minimum wage: Alaska, California, Minnesota, Montana, Nevada, Oregon and Washington. The minimum wage for tipped workers is highest in Washington, at $8.55 per hour. (Hawaii permits tipped workers to be paid just 25 cents less per hour than other workers.)
    Under federal law, even if all tips are in cash, the IRS assumes that employees make at least $8 in tips for every $100 of food and beverages sold. That’s the rate that the IRS requires employers to withhold at. In addition, tipped employees must claim enough tips to get up to the minimum wage, and pay taxes on them. So the days when much of a tipped worker’s income was tax free are gone. HTH, and thanks for reading the blogs!~ Amelia

  11. Posted by: Leslie Mandic

    Thanks Amelia!

    BTW where do you find your source for each state? The server wage, I have had trouble finding it.

    –leslie

  12. Posted by: Amelia

    Hi Leslie! In order to find the tipped minimum wage for each state, you pretty much have to contact each state department of labor. You can also search our archives for “Arizona minimum wage” or whatever state you are interested in. We post articles each time a state or federal minimum wage changes. Those articles normally include the tipped minimum wage. HTH!~ Amelia

  13. Posted by: Elizabeth

    I am a server at just above the $2.33 wage in Wisconsin. The restaurant I work at has decided to close the kitchen at 10 pm but keep the bar section open until 2:30 am. I am required to work alone from 11-3 at the same wage. Shouldn’t I get a bartenders wage instead of a server wage once the kitchen closes and what if I don’t feel safe alone when the kitchen staff leave.

  14. Posted by: Amelia

    Hi Elizabeth! Yes, it would be the right thing for the emplloyer to pay you bartender’s wages from 11 to 3 each day. However, from a legal standpoint, as long as you are averaging at least the state minimum wage (including tips) for all hours worked, this is probably legal. We are more concerned about the safety issue. If you do not feel safe working alone from 11 pm to 3 am, then don’t do it. No job is worth putting yourself in danger for. HTH, and thanks for reading the blog!~ Amelia

  15. Posted by: Heather

    Message: Hi Amelia,

    I live in Georgia and work for a restaurant that pays the standard $2.13/hour. Most of the time this is fine, but the month of June is very slow. I worked this past Saturday night for six hours and made $5.00 in tips, then worked five hours the next day and made $13.00 in tips. The average for these two days is somewhere around $3.77/hour (including the $2.13 hourly rate). My question is does the employer have to pay the difference for every hour worked or is there a weekly average rule? I want to have my facts straight before I go asking for more money, which as slow as business is, I am sure they will be not too happy to give. Thanks for the help!

    Heather

  16. Posted by: Amelia

    Hi Heather! Tipped employees in Georgia must average $6.55 per hour worked over the payroll period when tips and wages are added together. If you work 30 hours this week, you should be paid $196.50 including tips before taxes. Most restaurants have a system in place to handle this. If not, tactfully mention to your supervisor that you will be owed additional wages this week. HTH, and thanks for reading the blogs!~ Amelia

  17. Posted by: joy

    I am 8 months pregnant and worked in a small diner until recently. My boss, who is also the owner, informed me that he would be keeping all of my tips and pay me $8/hr, but I would be fired on the spot if I told any customer. Being 8 months pregnant with regular customers, I was starting to receive monetary gifts in my tips, and he kept those as well. I told him I felt it was dishonest. I only lasted 3 days before the stress of the situation got to me. If I never filled out a new w4 (contract), does he still owe me my tips and $4.19/ hr, or can he get away with stealing from my baby?

  18. Posted by: Amelia

    Hi Joy! A W-4 is not a contract, and an employer need not have a worker fill out a new W-4 when she receives a raise.
    What your boss did may be illegal under federal law. The federal FLSA or Fair Labor Standards Act requires that employees be permitted to keep all tips. You should file a wage claim with the US Department of Labor for your tips.
    There may be a loophole here because your boss gave you an increase and was not paying you $4.19 per hour. Your boss offered you a new arrangement: you would earn $8 per hour but receive no tips. When you began working under this arrangement, you accepted the new wage. (The alternative was quitting.) But if you file a wage claim with the US or State department of Labor, they will be able to sort this out.
    We will add that this restaurant owner is a real jerk, and you SHOULD tell the customers that he kept all of the tips they gave you — even if you have to make a special trip to the restaurant to do so. HTH, and thanks for reading the blogs!~ Amelia

  19. Posted by: Tristan

    Hi, I am a server in Kentucky and my boss makes us claim our cash and credit card tips at the end of the night. At the restaurant I worked at previously we used the same kind of system and when we edited our credit tips it was automatically claimed, so at the end of the night when you claimed you only had to put in your cash tips. My question is, is my current boss making us over claim? Also often he will make us claim more cash if he thinks we made more than we claimed, based on our sales, is that legal?

  20. Posted by: Amelia

    Hi Tristan! That’s not only legal, your boss is required by law to do so.
    Federal law and IRS regulations require that servers claim every penny in tips that they make.
    Different restaurants have different payroll systems. Some will automatically add credit card tips to an employee’s declared tips, others will not. Either way, under federal law, the employee must declare all tips. An employer who collaborates with the employer to under-report tips is conspiring to commit tax fraud.
    If you fear your credit card tips are being reported twice, keep an accurate written record of your cash and credit tips for one payroll period. The total amount of declared tips should apprear on your check stub. If it is significantly more than your written total, then you are right. (Under federal law, you should be keeping written records of all tips anyway.)
    The IRS generally assumes that servers in full-service restaurants net tips equal to 8% of the servers total food and beverage sales. The IRS requires the employer to withhold taxes on this amount or on the employee’s actual declared tips, whichever is greater. At the end of the year, if your written tip records show that your actual tips were lower than 8%, you may be entitled to a tax refund.
    If at any point your actual tips plus hourly wages over the payroll period average less than the state minimum wage of $7.25 per hour, the employer must pay you the difference in wages. Which is another reason that he has a vested interest in making sure you declare every penny in tips. HTH, and thanks for reading the blogs!~ Amelia

  21. Posted by: Christo

    Hello… just looking for clarification to ease my mind and know what course of action I should take.

    I started a new job Aug 19 as a server at a new restaurant in Missouri. Our POS was not up and running until Aug 27 which meant the time we spent training & preparing the restaurant for its opening had to be manually recorded.

    I was informed that the compensation for the training period is min wage, $7.25/hr.

    Labor Day weekend was intense while we were understaffed and still a bit disorganized. Being only my second serving position and having only a few months experience, my supervisor informed me that I would be starting a two week retraining(following a server). I started my retraining Sep 8 and on Sep 14 I was informed that the powers that be felt that no matter how much ‘training’ (following) I have I will not reach their standards. No, I’m not THAT bad… not at all actually. I treat everyone I serve like a guest and everyone I work with, with respect.

    Aside from feeling patronized & degraded, I finally received my first and only check yesterday Sep 23 (dated Sep 18) and noticed that I was paid incorrectly.

    Pay frequency is bi-weekly and my check shows the pay period as 8/31 - 9/13.

    Tipped wages in Missouri is $3.63/hr. It looks like they calculated more tipped wage hours and less training hours. On top of this, the pay rate for my training hours was $5/hr.

    I tried to do some research since the laws seem kinda vague and confusing. I contacted the Department of Labor - Division of Labor Standards this morning but I didn’t I verbalized my questions and concerns the way I wanted to. So here I am…

    Don’t worry… I’m getting to my questions..

    Can my employer combine 2 pay periods into one?

    If they can, can they use earned/declared tips against all hours worked?

    Meaning, If I worked a grand total of 96 hours over the course of 2 pay periods combined onto one check as one pay period:
    70 hours as tipped wage hours ($3.63/hr)
    and the balance of 26 training hours($5),
    can they say that the tips I make count towards making min wage so that they don’t have to pay the difference? (I hope I’m making sense).

    Simply put… if they say they will be paying me $7.25 for training and I work 26 hours “training” with NO sales under my employee # … am I not entitled to 26hrs x $7.25/hr?

    Can they back down from their word or am I protected by any laws?

    I keep meticulous records and have my daily Check/Clock Out sheets which show Time In, Time Out, Shift hours worked, cumulative hours worked for the week, Sales and Tips declared. If need be, can I use these to plead my case?

    Your help and insight in greatly appreciated and I’m glad there is such a site to voice concerns. THANK YOU.

  22. Posted by: Amelia

    Hi Christo! As much as we would like to help you, this may have partially been a miscommunication. We suspect that when the employer said you would be paid minimum wage for training, they meant training prior to the restaurant opening. Once the restaurant opened and actually started serving food, servers would be earning tips and paid the tipped wage. This is standard procedure in opening new restaurants.
    You are entitled to payment for every hour worked, even while the POS system was not in place. The employer is responsible for keeping accurate payroll records.
    If the employer specifically told you that you would be paid $7.25 per hour plus tips while you “followed” another server around for additional training, you may have a case. But we suspect that they were trying to say, that you would earn the minimum wage of $7.25 with tips and wages combined — which is the law.
    It’s important to understand the difference between a payroll WEEK and a pay PERIOD. Every employer must establish a payroll week, and it cannot fluctuate. In this case, it appears that the payroll week runs from Monday to Sunday. So Mon. 8/31 to Sun. 9/6 was one payroll week, and Mon. 9/7 to Sun. 9/13 was a second payroll week. Those two payroll weeks combined are one pay period. This is perfectly lawful.
    Under the Missouri minimum wage law, you are entitled to the minimum wage for each hour worked during the payroll WEEK, when tips and wages are added together. The employer cannot average your tips over the two payroll weeks (or two payroll periods) to determine if you earned at least the minimum wage.
    The employer figures your time for the WEEK at $3.63 per hour — the tipped minimum wage in Missouri. Then they add in any tips you earned during this time. (It doesn’t matter whether food was rung up under your I.D. number or not — any tips you earned must be reported and added in.) If that does not bring your total up to the minimum wage of $7.25 per hour, then the employer increases your wage until you reach that level. That is probably what the $5 per hour is — the employer is paying you additional monies so that you come up to the minimum wage.
    However, the employer cannot average your tips over the payroll PERIOD to determine if you are earning the minimum wage or not. It must be averaged over the payroll week.
    To answer your question, no, you probably are not entitled to 26 hrs x $7.25 per hour. For the payroll weeks of 8/31 to 9/6 and 9/7 to 9/13, you are probably entitled to (total hours worked in that payroll week) x $7.25 per hour minus all tips earned during that payroll week.
    For the payroll week of 8/24 to 8/30, it sounds as if you made little or no tips. If you earned no tips at all in that period, you would be entitled to $7.25 per hour for the hours you actually worked in that payroll week.
    It’s great that you have kept accurate records! Our suggestion is that you sit down and figure out what you should have been paid for each payroll week. Then, contact the Missouri Division of Labor Standards and file a wage complaint for any week in which you did not earn at least $7.25 per hour. HTH, and thanks for reading the blogs!~ Amelia

    Read more about this at: http://www.sos.mo.gov/adrules/csr/current/8csr/8c30-4.pdf

  23. Posted by: Anthony

    I am a server in New Jersey. Recently, we were told our owners were taking 20 cents out of every hour working from our paychecks to make up for the cost of any free incentives we incur (such as beverages, staff meals….). We make $2.13/hr plus tips. By doing this, if they were to take 20 cents out of every hour, wouldn’t we really be making $1.93/hr? And by law, that is below minimum wage. Should they not raise our min. wage to $2.33 to compensate?

  24. Posted by: Amelia

    Hi Anthony! This deduction is not lawful. New Jersey sets severe limits on the payroll deductions an employer can make. Even if the employer increased your wages to $2.33 per hour, such a deduction would be unlawful. Your best bet is to wait several pay periods (until the amount owed reaches $10 or $20), and save your paycheck stubs. Then file a wage claim with the New Jersey Department of Labor and Workforce Development. HTH, and thanks for reading the blog!~ Amelia

    Read more about this at: http://lwd.dol.state.nj.us/labor/wagehour/content/wage_and_hour_compliance_faqs.html#q33

  25. Posted by: Lesha

    I am a server in Texas making 2.13/hr. Are employers required to pay minimum wage per shift or is it an average over the entire pay period? I asked my employer about minimum wage if we are not receiving tables and his reply was” there are many loopholes to that law and I will take advantage of them” How, on my end, do I need to ensure I am not being taken advantrage of?

  26. Posted by: Lesha

    I meant to include this also…Is it legal for an employer to force us to pay for a ticket that has walked out without paying, or for a misring on tickets?

  27. Posted by: Amelia

    Hi Lesha! Your employers reply was rude and condescending — and inaccurate. There are not any loopholes in the law.
    Both Texas and federal minimum wage laws require that a tipped employee earn at least the minimum wage when wages and tips are added together. However, the average is over the pay period, not for a single shift. A tipped employee may earn less than the minimum wage on Tuesday night, but more than make up for it on Friday and Saturday nights.
    Both the federal and Texas minimum wages are $7.25 per hour. That means you need to average $5.12 per hour in tips (over the payroll week) to earn the minimum wage.
    Every tipped employee should keep an accurate written record of the hours worked each day, and the tips earned. Tips earned includes cash tips, as well as those left on a credit card. If you tip out busboys or bartenders, you can deduct that amount from tips earned. A small notebook or dayplanner is very useful for this.
    You should also determine what your employer’s payroll week is. Then, each week, you should total the hours worked. If your tips are less than (hours worked x $5.12 = tips) then you are entitled to additional wages. Despite your employer’s snippy answer, most payroll programs automatically add in the difference. If you find you are not earning the minimum wage, file a wage complaint with the TWC, the Texas Workforce Commission. They will investigate and collect for you.
    Your boss’s answer is not indicitive of a well-managed restaurant. When the economy is better, you would be more than justified in looking for a new job. HTH, and thanks for reading the blogs!~ Amelia

  28. Posted by: Amelia

    Hi again Lesha! This is somewhat of a gray area. Here’s the dilemma: the employer cannot legally deduct this amount from your pay, or “force” you to do anything. However, the employer can fire you for making this type of mistake, even once.
    In Texas as in many states, the employer cannot lawfully deduct the cost of such mistakes from an employee’s paycheck, without the employee’s written permission. So if you refuse to pay, the employer cannot “force” you to. However, the employer can fire you for making any one of these mistakes, which resulted in a loss of revenue for the restaurant. Many servers would pay the amount, to keep their job.
    In many cases, an employee who refused to pay a ticket when the customer “walked” and was fired, would qualify for unemployment benefits. That is because whether or not the customer pays, is probably outside of the server’s control. However, an employee who was fired for making mistakes like ringing the wrong price on a check, would likely not qualify for unemployment benefits. HTH, and thanks for reading the blogs!~ Amelia

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