2016 Indiana Tipped Minimum Wage
The 2016 Indiana Tipped Minimum Wage is $2.13.
Effective 2016-01-01Source: Indiana Minimum Wage Law (Indiana Department of Labor)Verified 2026-09-01
Who it applies to
Indiana employers that claim a tip credit for tipped employees
What changed this year, and why
Indiana's minimum cash wage for tipped employees remained $2.13 per hour in 2016.
Common questions
- What is the minimum cash wage for tipped employees in Indiana in 2016?
- Employers that claim a tip credit must pay tipped employees at least $2.13 per hour in direct wages.
- What happens if tips plus the cash wage do not reach the full minimum wage?
- The employer must make up the difference so that the employee receives at least the full minimum wage for every hour worked.
What a tip credit is, and the cash wage underneath it
Under Indiana law, an employer who hires a tipped employee may claim a tip credit, which allows the employer to count a portion of the employee's tips toward satisfying the minimum wage obligation. Instead of paying the full minimum wage directly, the employer pays a lower direct cash wage. Indiana requires that this cash wage be at least $2.13 per hour. The tip credit is the gap between that cash wage and the full minimum wage — the employer is effectively using the employee's tips to cover that gap. For this arrangement to be lawful, the employee's tips must be large enough that the cash wage plus the tips together equal or exceed the full minimum wage for every hour worked. If tips fall short in any pay period, the employer is required to make up the shortfall. The tip credit is therefore not a blanket reduction in pay; it is conditional on the employee actually receiving enough in tips to bridge the gap between the $2.13 cash wage and the minimum wage. Indiana's Department of Labor enforces this rule for employers covered by the Indiana Minimum Wage Law, and most Indiana employers are also covered by the federal Fair Labor Standards Act, which applies the same framework.
Generally, employers must pay tipped employees at least $2.13 per hour if the employer claims a tip credit.
Indiana Minimum Wage Law (Indiana Department of Labor)
When the tips do not get you to the minimum wage
Indiana law protects tipped employees from earning less than the full minimum wage in any pay period. A tipped employee in Indiana receives a direct cash wage of at least $2.13 per hour, with the expectation that tips will bring total compensation up to the minimum wage. However, tips can vary from week to week — a slow shift or a quiet season may mean the employee's tips plus the cash wage fall below the minimum. When that happens, Indiana law is clear: the employer must make up the difference. This obligation falls entirely on the employer, not the employee. The employer cannot average tips across pay periods or shift the shortfall to the worker. For every hour worked, the combined total of the cash wage and the tips received must reach at least the full minimum wage, and if it does not, the employer pays the remainder out of pocket. This rule ensures that the tip credit arrangement never results in sub-minimum earnings for tipped workers in Indiana, regardless of how much business the employer is doing on a given day.
If the employee’s tips combined with the hourly wage do not equal the minimum wage, the employer must make up the difference.
Indiana Minimum Wage Law (Indiana Department of Labor)
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.
Indiana Minimum Wage Law (Indiana Department of Labor)
- Minimum cash wage
Generally, employers must pay tipped employees at least $2.13 per hour if the employer claims a tip credit.
Other years
Every Indiana Tipped Minimum Wage year · Tipped Minimum Wage in every state