What happens if a tipped employee's tips plus the cash wage do not reach the full minimum wage?

Name: 2023 Arkansas Tipped Minimum Wage
Creator: DOL

The employer must make up the difference so the employee receives at least the applicable minimum wage.

2023 Arkansas Tipped Minimum Wage

The 2023 Arkansas Tipped Minimum Wage is $2.63.

Minimum cash wage$2.63

Effective 2023-01-01Source: Minimum Wage and Overtime (Arkansas Department of Labor and Licensing)Verified 2026-08-30

Compared with 2022

Every figure on this page is unchanged from 2022.

Item	2022	2023	Change
Minimum cash wage	$2.63	$2.63	+$0 (+0.0%)

Who it applies to

Tipped employees in Arkansas covered by the state Minimum Wage Act

What changed this year, and why

For 2023, the minimum cash wage for tipped employees in Arkansas is $2.63 per hour.

Common questions

What happens if a tipped employee's tips plus the cash wage do not reach the full minimum wage?: The employer must make up the difference so the employee receives at least the applicable minimum wage.

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

In Arkansas, the law recognizes that some workers receive tips as part of their job. When tips are regular and expected, the employer may pay a lower direct cash wage of $2.63 per hour instead of the full minimum wage. This lower rate applies to employees in positions like servers, bartenders, or hotel staff where gratuities are customary. However, your employer must ensure that your combined earnings from the cash wage plus tips equal at least the applicable minimum wage for every hour worked. If your tips plus the $2.63 hourly wage fall short of minimum wage in any work period, your employer is legally required to make up the difference. Your employer must also maintain accurate records of the tips you receive. This system allows employers to account for tip income while still guaranteeing workers receive at least minimum wage for their labor.

Tipped employees must be paid at least $2.63 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 you're a tipped employee whose tips don't bring your total hourly earnings up to the minimum wage, your employer must make up the difference. This means that even though your employer can pay you a lower base wage of $2.63 per hour, they're legally obligated to ensure you earn at least the full minimum wage when combining your cash wages and tips. The employer must add enough to your paycheck to reach the minimum wage threshold. This protection ensures that the tip credit system doesn't result in you earning less than minimum wage. Your employer is responsible for tracking your tips and calculating whether you've reached the minimum wage floor, and for paying you the additional amount needed if you haven't.

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, your employer has the responsibility to keep accurate tip records for you as a tipped employee. This means your employer must track the tips you report and maintain documentation of your tip income. Accurate record-keeping is essential for ensuring you receive proper wages and for calculating whether your combined cash wage and tips reach the minimum wage. If your tips plus the cash wage of $2.63 per hour fall short of minimum wage, your employer must make up the difference, and accurate records are necessary to determine when this occurs. Your employer's obligation to maintain these records protects your rights as a worker and provides documentation if there are disputes about your wages or tip income.

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

When state law gives more than the federal rule

In Arkansas, both federal and state wage laws may apply to tipped employees. When multiple laws apply, your employer must follow the standard that provides the greatest protection to you as the employee. This means if federal law and Arkansas law have different rules about tipped wages, tip credits, or tip pooling, your employer must comply with whichever rule is more favorable to workers. For example, if one law requires a higher cash wage or stricter notice requirements than the other, your employer must follow that higher standard. The Arkansas Minimum Wage Act covers employers with four or more employees, and employers covered by the federal Fair Labor Standards Act are also covered by Arkansas law if they meet that employee threshold. When you're covered by both laws, the rule that puts more money in your pocket or gives you stronger protections is the one your employer must follow.

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, your employer cannot take or keep your tips. The tip credit system allows employers to pay you a lower cash wage of $2.63 per hour, but this doesn't give them the right to your tips. All tips you receive from customers belong to you. Your employer may not use your tips for business expenses, to cover shortages, or for any other purpose. The only exception is when you participate in a valid tip pool with other tipped employees who customarily receive tips, such as bussers or bartenders. Even then, managers and supervisors cannot participate in tip pools or keep any portion of your tips. Your employer's role is limited to tracking your tip income for wage calculation purposes, not controlling or accessing the tips themselves.

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, tip pooling arrangements must be limited to employees who customarily and regularly receive tips in their occupations. This means you can only be required to share your tips with other service workers like servers, bussers, and bartenders who also earn tips as part of their regular job. You cannot be forced to share tips with managers, supervisors, cooks, dishwashers, or other employees who don't typically receive tips. The tip pool must include only workers in tip-earning positions. This restriction ensures that tip sharing benefits the employees who actually earn tips through direct customer service, rather than being diverted to management or non-tipped positions. Any tip pooling arrangement that includes non-tipped employees or supervisors violates the law.

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 you perform multiple jobs for the same employer, you're only considered a tipped employee for the work where you actually receive tips. If you work as both a server and a host for the same restaurant, for example, you're a tipped employee only during your server shifts when you receive tips. During your host shifts, if that position doesn't generate tips, your employer must pay you at least the full minimum wage and cannot use the tip credit. Your employer must clearly separate your tipped work time from your non-tipped work time and pay you accordingly. You cannot be paid the lower tipped wage rate of $2.63 per hour for work that doesn't produce tips. This dual jobs rule prevents employers from applying the tip credit to positions that don't generate tip income.