2020 Federal Tipped Minimum Wage
The 2020 Federal Tipped Minimum Wage is $2.13.
Effective 2020-01-01Source: Minimum Wages for Tipped Employees (DOL)Verified 2026-08-30
Compared with 2019
Every figure on this page is unchanged from 2019.
| Item | 2019 | 2020 | 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 2020, last revised on July 1, 2020, 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 2020?
- $2.13 per hour. The Department of Labor's table of minimum wages for tipped employees for 2020, last revised on July 1, 2020, 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 2020, last revised on July 1, 2020. 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
In Federal law, a tipped employee is someone who works in an occupation where they customarily and regularly receive more than $30 a month in tips. This threshold determines whether the special tipped employee rules apply to you. If you meet this definition, your employer can pay you a lower cash wage and take a tip credit toward its minimum wage obligations. However, only the tips you actually receive count toward this determination—not tips you might expect to receive or tips that are allocated to you through a formula. This definition applies across all industries covered by the FLSA, from restaurants and bars to hotels and other service establishments where tipping is customary.
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
Under Federal law, an employer can take a tip credit equal to the difference between the cash wage it pays directly to a tipped employee and the federal minimum wage. The minimum cash wage the employer must pay is $2.13 per hour. The tip credit covers the gap between that cash wage and the full minimum wage, meaning the employer counts a portion of the tips you receive as part of your wages for minimum-wage purposes. The maximum tip credit an employer can claim is capped so that the cash wage plus the credit together reach the full minimum wage. Only tips you actually receive count when the employer applies the tip credit. If you do not earn enough in tips to bring your total compensation up to the full minimum wage for a given workweek, the employer must cover whatever shortfall remains.
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
Under Federal law, even when your employer takes a tip credit, it must ensure that your combined cash wages and tips reach at least the full minimum wage in every workweek. If your tips combined with the employer's direct cash wages fall below the minimum hourly wage in any workweek, the employer must make up the difference. This means the employer cannot rely on slow weeks or low tip income to pay you less than the minimum wage overall. The guarantee applies each workweek individually, so the employer cannot average high-earning weeks against low-earning weeks to avoid paying what is owed. If the employer fails to make up the shortfall, it has violated the FLSA and owes you the unpaid wages.
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
Under Federal law, before an employer can take a tip credit, it must inform you of specific information about how the tip credit works. The employer must tell you the amount of the direct cash wage it is paying you, which must be at least $2.13 per hour. It must also tell you the additional amount it is claiming as a tip credit, which cannot exceed the difference between the minimum cash wage and the full minimum wage. You must be told that the tip credit cannot exceed the tips you actually receive, that all your tips belong to you except for a valid tip pool, and that the tip credit will not apply unless you have been informed of all these provisions. The notice can be given orally or in writing. If the employer fails to provide this information, it cannot take the tip credit at all and must pay you the full minimum wage.
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
Under Federal law, when a state law differs from the federal FLSA rules for tipped employees, the employer must comply with whichever standard is most protective to employees. For example, some states require a higher cash wage than the federal minimum of $2.13 per hour, and some states prohibit employers from taking a tip credit altogether. If the state rule gives you a higher cash wage or better tip protections than the federal rule, your employer must follow the state rule instead. This means that even though Federal sets a floor for tipped employee protections, individual states can provide stronger safeguards, and employers cannot use the more permissive federal standard to avoid the stricter state requirements.
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
Under Federal law, the FLSA prohibits employers from keeping any portion of employees' tips for any purpose, whether directly or through a tip pool. This rule applies regardless of whether the employer takes a tip credit. An employer may not require you to hand over your tips to the employer itself, a supervisor, or a manager, even in situations where the employer pays you the full minimum wage in direct wages and takes no tip credit at all. The tips you receive from customers belong to you. Managers and supervisors are specifically barred from participating in tip pools or receiving shares of other employees' tips. The only tips a manager or supervisor may keep are those they receive directly from customers for service they personally and solely provide.
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
Under Federal law, when an employer takes a tip credit, it can require you to participate in a tip pool, but that pool must be limited to employees in occupations in which they customarily and regularly receive tips. Examples of eligible occupations include waiters, bellhops, counter personnel who serve customers, bussers, and service bartenders. The employer cannot include managers or supervisors in such a pool, and the employer itself may not take any share of the pooled tips. The employer must notify you of any required contribution amount and may only take a tip credit for the tips you ultimately receive after the pool is distributed. If the employer pays the full minimum wage instead of taking a tip credit, different rules apply and the pool may include non-tipped workers as well, but managers and supervisors are still excluded from participating.
to a tip pool which is limited to employees in occupations in which they customarily and regularly receive tips, such as waiters, bellhops, counter personnel (who serve customers), bussers, and service bartenders.
Fact Sheet #15: Tipped Employees Under the Fair Labor Standards Act (FLSA) (DOL)
Doing two jobs for one employer
Under Federal law, when you work two distinct jobs for the same employer, you are considered a tipped employee only with respect to the occupation in which you customarily and regularly receive at least $30 a month in tips. For example, if you work as a hotel maintenance person and also serve as a server, and you regularly receive at least $30 a month in tips from your server work, the tip credit rules apply only to your hours worked as a server. Your employer cannot take a tip credit for the hours you spend working as a maintenance person. During those non-tipped hours, you must receive the full minimum wage. This rule prevents employers from applying the lower cash wage to job duties that do not generate tips.
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