2016 Federal Tipped Minimum Wage
The 2016 Federal Tipped Minimum Wage is $2.13.
Effective 2016-01-01Source: Minimum Wages for Tipped Employees (DOL)Verified 2026-08-30
Compared with 2015
Every figure on this page is unchanged from 2015.
| Item | 2015 | 2016 | Change |
|---|---|---|---|
| Minimum cash wage | $2.13 | $2.13 | +$0 (+0.0%) |
Who it applies to
Employers of tipped employees covered by the federal Fair Labor Standards Act. The cash wage is the part of the minimum wage the employer pays directly; the rest may be met by the employee's tips, up to the maximum tip credit the same row of the table states beside it.
What changed this year, and why
The Wage and Hour Division's table of minimum wages for tipped employees for 2016, last revised on August 1, 2016, gives $2.13 per hour as the minimum cash wage an employer may pay a tipped employee under the federal Fair Labor Standards Act. The table carries only its own revision date and never dates the rate, so this page reports the figure as in force as of that revision rather than claiming an effective date no document states.
Common questions
- What was the federal tipped minimum cash wage in 2016?
- $2.13 per hour. The Department of Labor's table of minimum wages for tipped employees for 2016, last revised on August 1, 2016, gives that amount as the minimum cash wage under the Fair Labor Standards Act, with the remainder of the federal minimum wage able to be met by tips up to the maximum tip credit the same row states.
- What if tips did not bring the employee up to the full minimum wage?
- The employer paid the difference. A tip credit is a credit against the minimum wage the employer already owes, not a lower wage in its own right, so an employee whose cash wage and tips together fell short of the applicable minimum wage was owed the shortfall in wages.
- Where does the figure on this page come from?
- From the Wage and Hour Division's own archived table Minimum Wages for Tipped Employees for 2016, last revised on August 1, 2016. The federal row it was read from is quoted on this page, and the snapshot it was verified against is the one captured for this record.
Who counts as a tipped employee
Under federal law, you count as a tipped employee if you work in an occupation where you customarily and regularly receive more than $30 a month in tips. The $30 threshold is measured in tips you actually receive from customers - tips that never reach you do not count toward this total. Once you meet this definition, special rules under the Fair Labor Standards Act apply to how your employer must pay you, including the possibility that the employer will take a tip credit against its minimum wage obligation. If you work in an occupation where tips are occasional, irregular, or total to $30 or less in a typical month, you are not a tipped employee for FLSA purposes and your employer must pay you the full federal minimum wage without relying on a tip credit.
Under the FLSA, a tipped employee is an employee engaged in an occupation in which they customarily and regularly receive more than $30 a month in tips.
Fact Sheet #15: Tipped Employees Under the Fair Labor Standards Act (FLSA) (DOL)
What a tip credit is, and the cash wage underneath it
The federal tip credit is the amount an employer can subtract from the regular minimum wage it owes you, on the theory that your tips make up the rest. Under the FLSA, the tip credit equals the difference between the direct (cash) wage your employer pays you and the full federal minimum wage. Your employer must still pay you at least $2.13 per hour in cash. The tip credit makes up the gap between that cash wage and the full minimum wage, so your total earnings reach at least the minimum wage for every hour you work. Only tips you actually receive count toward whether the tip credit is valid. If you work in a job where tips are small or unpredictable, the employer still owes you enough in cash wages to reach the minimum wage for every hour you work.
An employer can take an FLSA tip credit equal to the difference between the direct wage, or the cash wage it pays directly to the tipped employee, and the federal minimum wage, which is currently $7.25 per hour.
Fact Sheet #15: Tipped Employees Under the Fair Labor Standards Act (FLSA) (DOL)
When the tips do not get you to the minimum wage
Federal law requires that your total earnings—cash wages plus tips—must reach at least $7.25 per hour every workweek. If your cash wage of $2.13 per hour plus your tips don't add up to the full federal minimum wage in any given workweek, your employer must make up the difference. This protection applies workweek by workweek, not averaged over longer periods. Your employer cannot rely on busy weeks to offset slow weeks where your tips were lower. The employer bears the legal responsibility to track your earnings and ensure you receive at least $7.25 per hour. If they fail to pay the difference when your tips fall short, they are violating federal wage law. This rule exists to ensure that the tip credit system doesn't result in you earning less than the guaranteed minimum wage.
If an employee’s tips combined with the employer’s direct (or cash) wages do not equal the minimum hourly wage of $7.25 per hour in each workweek, the employer must make up the difference.
Fact Sheet #15: Tipped Employees Under the Fair Labor Standards Act (FLSA) (DOL)
The notice an employer owes you before it takes the credit
Before an employer in Federal jurisdiction can take a tip credit against your wages, it must give you notice of the arrangement. Employers must provide the following information to tipped employees before taking a tip credit: the cash wage the employer is paying you (which must be at least $2.13 per hour), the amount the employer is claiming as a tip credit, that the tip credit cannot exceed the tips you actually receive, that you retain all of your tips unless they are pooled with other customarily-tipped employees, and that the tip credit does not apply unless you have been informed of these provisions. The notice may be given orally or in writing, but if the employer fails to give it, it cannot take the tip credit at all for that period and must pay you the full minimum wage in cash.
Employers must provide the following information to tipped employees before taking a tip credit under the FLSA:
Fact Sheet #15: Tipped Employees Under the Fair Labor Standards Act (FLSA) (DOL)
When state law gives more than the federal rule
When Federal law and state law both apply to your situation, your employer must follow whichever rule gives you greater protection. For example, some states require employers to pay a higher cash wage than the Federal minimum of $2.13 per hour, and some states don't allow employers to take a tip credit at all. In those cases, the state rule controls because it's more protective of employees. Even if Federal law would allow your employer to pay you $2.13 per hour and take a tip credit, if your state requires a higher direct wage or prohibits the tip credit entirely, your employer must comply with the state standard. This principle ensures that workers receive the maximum protection available under the combination of federal and state wage laws. Your employer cannot use Federal law as an excuse to pay you less than what state law requires.
When state law differs from the federal FLSA, an employer must comply with the standard most protective to employees.
Fact Sheet #15: Tipped Employees Under the Fair Labor Standards Act (FLSA) (DOL)
Your employer, your manager and your supervisor may not keep your tips
Regardless of whether an employer takes a tip credit, the FLSA prohibits employers from keeping any portion of employees' tips for any purpose, whether directly or through a tip pool. An employer in Federal jurisdiction may not require you to hand over your tips to the business, to a manager, or to a supervisor - even if the employer pays you the full minimum wage in cash and takes no tip credit at all. The rule is absolute: tips you receive from customers belong to you, and no part of them may be diverted to the employer or to anyone who manages or supervises you. This protection applies to every tipped employee covered by the FLSA, and it exists independently of the tip-credit rules.
Regardless of whether an employer takes a tip credit, the FLSA prohibits employers from keeping any portion of employees’ tips for any purpose, whether directly or through a tip pool.
Fact Sheet #15: Tipped Employees Under the Fair Labor Standards Act (FLSA) (DOL)
Which tip pools you can be made to join
Federal law limits mandatory tip pools to employees who work in jobs where they customarily and regularly receive tips. This means your employer can only require you to share your tips with other tipped employees—people like servers, bussers, and bartenders who typically earn tips as part of their regular work. Your employer cannot force you to share tips with non-tipped employees like cooks, dishwashers, or janitors who don't customarily receive tips. The tip pool must consist only of workers in occupations where tipping is a regular part of the job. This restriction protects your tip income from being diverted to employees who don't depend on tips as part of their compensation. If your employer requires you to participate in a tip pool that includes non-tipped employees, they're violating federal law and may lose the right to take the tip credit entirely.
limited to employees in occupations in which they customarily and regularly receive tips
Fact Sheet #15: Tipped Employees Under the Fair Labor Standards Act (FLSA) (DOL)
Doing two jobs for one employer
When you work two or more jobs for the same Federal employer - one tipped and one not - the tip credit applies only to the tipped job. In such a situation the employee, if they customarily and regularly receive at least $30 a month in tips for their work as a server, is a tipped employee only with respect to their employment as a server. For the non-tipped job, your employer must pay you the full minimum wage without taking any tip credit. The employer cannot blend your hours across both roles and treat all of them as tipped time. Each job must be evaluated separately: in the tipped job, the employer may pay the cash wage of $2.13 and claim a tip credit, provided it gives you the required notice; in the non-tipped job, it must pay you at least the full federal minimum wage in cash. If your duties shift back and forth within a single job, the employer may take the tip credit only for the time you spend performing tipped duties.
In such a situation the employee, if they customarily and regularly receive at least $30 a month in tips for their work as a server, is a tipped employee only with respect to their employment as a server.
Fact Sheet #15: Tipped Employees Under the Fair Labor Standards Act (FLSA) (DOL)
How each figure was verified
Each number below was read from a stored copy of the document named beside it, and checked to occur word for word in the quoted sentence. The digest is of that stored text.
Minimum Wages for Tipped Employees (DOL)
- Minimum cash wage
FEDERAL: Fair Labor Standards Act (FLSA) $7.25 $5.12 $2.13 More than $30
Other years
Every Federal Tipped Minimum Wage year · Tipped Minimum Wage in every state