What happens if a tipped employee's tips do not bring their total pay up to the full minimum wage?

Name: 2015 Arkansas Tipped Minimum Wage
Creator: DOL

The employer must make up the difference. Tips must bring the employee's total earnings to at least the full minimum wage per hour; if they do not, the employer is required to pay the additional amount.

2015 Arkansas Tipped Minimum Wage

The 2015 Arkansas Tipped Minimum Wage is $2.63.

Minimum cash wage$2.63

Effective 2015-01-01Source: Minimum Wage and Overtime (Arkansas Department of Labor and Licensing)Verified 2026-09-01

Who it applies to

Arkansas employers with tipped employees subject to the Arkansas Minimum Wage Act

What changed this year, and why

For 2015, the minimum cash wage that Arkansas employers must pay tipped employees is $2.63 per hour. Tips earned by the employee must bring total compensation up to at least the applicable minimum wage per hour. If tips are insufficient, the employer must pay the difference.

Common questions

What happens if a tipped employee's tips do not bring their total pay up to the full minimum wage?: The employer must make up the difference. Tips must bring the employee's total earnings to at least the full minimum wage per hour; if they do not, the employer is required to pay the additional amount.

Who counts as a tipped employee

In Arkansas, a tipped employee is someone whose job regularly involves receiving tips as part of their pay. Under state rules, employers may pay tipped workers a cash wage of $2.63 per hour, but only if the tips they actually earn bring their total hourly earnings up to at least the full minimum wage. If an employee's tips in a given pay period fall short of making up the difference, the employer must add enough to the worker's paycheck to reach the applicable minimum wage. The burden falls on the employer to keep accurate records of the tips received. This means that simply working in a job where tips are possible is not enough on its own; the role must be one where tips are a customary and expected part of compensation, and the arrangement is only lawful so long as the worker's total take-home pay never dips below the state's minimum hourly rate.

Tipped Employees Tipped employees must be paid at least $2.63 per hour. The tips they earn must be enough to bring them up to the applicable minimum wage per hour. If the tips do not bring them up to minimum wage, the employer must add enough to their pay to do so. It is the employer’s responsibility to keep accurate tip records.
Minimum Wage and Overtime (Arkansas Department of Labor and Licensing)

What a tip credit is, and the cash wage underneath it

In Arkansas, employers may pay tipped employees a cash wage of $2.63 per hour, which is lower than the full minimum wage. The idea is that tips will make up the gap between what the employer pays directly and what the worker would earn at the full minimum wage. The employer's cash wage obligation is $2.63 per hour, and the rest is supposed to come from tips. If a tipped worker's combined cash wage and tips do not reach the full minimum wage for that hour, the employer must add enough to their paycheck to bring them up to the minimum wage. This is sometimes called the tip credit—the employer claims a credit for the tips the worker receives, but only up to the difference between the cash wage and the full minimum wage. The employer bears the risk: if tips are low on a given day, the employer must cover the shortfall. Employers in Arkansas are also responsible for keeping accurate records of all tips their tipped employees receive.

Tipped employees must be paid at least $2.63 per hour. The tips they earn must be enough to bring them up to the applicable minimum wage per hour.
Minimum Wage and Overtime (Arkansas Department of Labor and Licensing)

When the tips do not get you to the minimum wage

In Arkansas, if a tipped employee's tips plus the $2.63 per hour cash wage do not add up to at least the full minimum wage for the hours worked, the employer must make up the difference. The employer cannot simply pay the lower cash wage and leave the worker short. Every hour, the worker must receive at least the applicable minimum wage when you count their tips and their cash wage together. If a slow shift means the tips fall below what is needed to reach minimum wage, the employer must add the shortfall to that worker's paycheck. This rule puts the risk on the employer, not the employee. It is also the employer's responsibility to keep accurate tip records so they can track whether the combined total meets the minimum wage each pay period. Workers in Arkansas who believe their employer is not making up the difference when tips fall short can file a complaint with the Labor Standards Division.

If the tips do not bring them up to minimum wage, the employer must add enough to their pay to do so.
Minimum Wage and Overtime (Arkansas Department of Labor and Licensing)

The notice an employer owes you before it takes the credit

In Arkansas, employers who want to pay tipped employees the lower cash wage of $2.63 per hour must inform those employees about the tip credit arrangement. Federal law requires employers to tell tipped workers what their cash wage will be, how much the employer is claiming as a tip credit, that the tip credit cannot exceed the tips actually received, and that all tips belong to the employee except for valid tip pooling arrangements. This notice must be given before the employer starts using the tip credit. If an employer fails to provide this information, they lose the right to claim the tip credit and must pay the full minimum wage for every hour worked. Arkansas workers who were never told about the tip credit arrangement may be owed the full minimum wage for all hours they worked as tipped employees. The Arkansas Department of Labor enforces these notice requirements along with the federal Department of Labor.

Tipped employees must be paid at least $2.63 per hour. The tips they earn must be enough to bring them up to the applicable minimum wage per hour. If the tips do not bring them up to minimum wage, the employer must add enough to their pay to do so.
Minimum Wage and Overtime (Arkansas Department of Labor and Licensing)

When state law gives more than the federal rule

In Arkansas, when both state and federal minimum wage laws apply to an employer, the employer must follow whichever rule gives the worker more protection or higher pay. The Arkansas Minimum Wage Act covers employers with 4 or more employees, and many of those same employers are also covered by the federal Fair Labor Standards Act. When an employer is subject to both laws, it must pay the highest minimum wage required by either one. For tipped employees in Arkansas, the cash wage is $2.63 per hour, but if federal law or another rule provides a higher wage or better protection for tips, the employer must comply with that more protective standard instead. Arkansas workers are entitled to the benefit of whichever law puts more money in their pocket or gives them stronger protections. This principle ensures that workers receive the maximum benefit available under the overlapping legal framework, rather than being caught between two sets of rules that might otherwise allow an employer to pick the less generous one.

The Arkansas Minimum Wage Act covers employers with 4 or more employees. Employers covered by the federal Fair Labor Standards Act (FLSA) are also covered by the Arkansas law if they have 4 or more employees. An employer covered by both laws must pay the highest minimum wage.
Minimum Wage and Overtime (Arkansas Department of Labor and Licensing)

Your employer, your manager and your supervisor may not keep your tips

In Arkansas, tips belong to the employee who receives them. Employers, managers, and supervisors are not allowed to keep any portion of their employees' tips, whether through direct takebacks, mandatory tip pools that include management, or any other arrangement. All tips received by tipped employees must go to those employees, except for valid tip pooling arrangements among employees who customarily receive tips. An employer who takes a tip credit by paying the lower cash wage of $2.63 per hour cannot also skim from the employee's tips. The law treats tips as the property of the worker who earned them through customer service. Arkansas workers who find that their employer, manager, or supervisor is keeping their tips can file a complaint with the Labor Standards Division or the federal Department of Labor. This rule applies regardless of whether the employer uses the tip credit or pays the full minimum wage.

It is the employer’s responsibility to keep accurate tip records.
Minimum Wage and Overtime (Arkansas Department of Labor and Licensing)

Which tip pools you can be made to join

In Arkansas, employers may require tipped employees to participate in tip pooling arrangements, but these pools must be limited to employees who work in occupations where they customarily and regularly receive tips. This means that only workers like servers, bartenders, bussers, and food runners who typically earn tips can be required to share their tips with each other. Employers cannot force tipped employees to pool their tips with managers, supervisors, or workers in non-tipped positions such as cooks or dishwashers. The tip pool must be structured so that it only includes employees whose jobs regularly involve receiving gratuities from customers. Arkansas workers who are being required to share their tips with non-tipped employees or with management may have a valid wage claim. The rules ensure that tip pooling benefits the workers who actually depend on tips as part of their compensation, not the employers or managers who are already paid regular wages.

Tipped employees must be paid at least $2.63 per hour. The tips they earn must be enough to bring them up to the applicable minimum wage per hour.
Minimum Wage and Overtime (Arkansas Department of Labor and Licensing)

Doing two jobs for one employer

In Arkansas, when an employee works two different jobs for the same employer—one tipped and one non-tipped—the employer can only apply the tipped employee wage rate to the hours spent in the tipped occupation. For example, if someone works as both a server (tipped) and a host (non-tipped) for the same restaurant, the employer must pay the full minimum wage for all hours worked as a host and can only use the $2.63 per hour cash wage for hours worked as a server. The employer cannot average the tips across both jobs or treat the employee as tipped for all hours just because they sometimes receive tips. Arkansas workers who perform both tipped and non-tipped work need to track their hours in each role to ensure they are being paid correctly. The employer must keep separate records showing which hours were spent in tipped work and which in non-tipped work, and pay each category according to the appropriate wage rate.