The FLSA allows you to take a tip credit toward your minimum wage obligation for tipped employees.
That’s right. You can take a tip credit of $4.42 — the difference between the required cash wage ($2.83 in Pennsylvania) and the federal minimum wage (which is currently $7.25). Here’s another way of looking at it:
$7.25 (Federal Minimum Wage)
–2.83 (Minimum PA Cash Wage)
$4.42 (Maximum Tip Credit Against Minimum Wage)
Remember, a tipped employee is one who receives more than $30 in tips monthly.
Have operations in other states? You can find state-specific information here.