By Jonah Flynn | September 23, 2026
A server can see $2.13 on a pay stub and still be owed more for that week. That figure is the federal cash-wage floor for an employer using a tip credit. It is not permission to pay $2.13 total for an hour of work. Tips the worker actually keeps must bring the pay up to the full federal minimum wage, and state law may require more.
What the tip wage covers
The Fair Labor Standards Act lets a covered employer count a limited amount of a tipped worker’s tips toward its minimum-wage duty. The worker must first receive the required cash wage. The employer can then claim a tip credit no larger than the tips the worker actually received. The rule comes from 29 U.S.C. § 203(m)(2)(A). The federal minimum wage itself is set by 29 U.S.C. § 206.
Here is the federal calculation for one hour when the employer pays the lowest permitted cash wage and takes the maximum tip credit:
| Part of the hour’s pay | Federal amount |
|---|---|
| Cash wage paid by employer | $2.13 |
| Maximum tips counted as a credit | $5.12 |
| Minimum total required | $7.25 |
Those are federal figures, not the right cash wage for every state. Georgia uses the federal tipped cash-wage floor for covered employers. Rhode Island and Connecticut set higher cash wages. Connecticut also has different tipped rates for wait staff and bartenders. The Georgia wage page, Rhode Island wage page, and Connecticut wage page give the state figures.
When can the employer use the credit?
The employer has to tell the worker about the tip credit before taking it. That notice covers the cash wage, the amount of credit claimed, and the worker’s right to keep tips except for a valid pool. An employer also must track enough information to show that cash wages plus tips actually kept met the full minimum wage in each workweek. See 29 C.F.R. § 531.59 and the U.S. Department of Labor’s tipped-worker guidance.
A tip jar or checkout slip can hide the key fact: the worker’s tips after mandatory tip-outs. Tips sent to a manager cannot be counted as tips the worker kept. Federal law bars employers, managers, and supervisors from keeping employee tips at all, whether or not the employer uses a tip credit. See 29 U.S.C. § 203(m)(2)(B). A valid pool has separate rules about who can receive a share.
What if the tips fall short?
The employer pays the difference. The $5.12 figure in the table is a ceiling on the federal credit, not an amount the employer may assume the worker earned. If the worker keeps less in tips, the allowed credit shrinks. The employer must increase its cash payment enough to meet the full minimum wage for the workweek. It cannot use a strong week to erase a shortfall in another week.
One employer response is that a busy worker “usually” earns enough tips. That does not answer what this worker received in this workweek. Another is that a tip pool took the money. The pool’s rules and recipients then become part of the wage calculation. Our tip-wage and tip-pool page explains how those pieces fit together.
We start with the pay stub, time record, card-tip report, cash-tip record if one exists, and the tip-out policy. We compare what the worker kept with the credit the employer claimed. In a successful Fair Labor Standards Act case, the employer can be required to pay a reasonable attorney’s fee under 29 U.S.C. § 216(b). That gives workers a way to bring claims that might otherwise cost more to pursue than the missing wages.
Every case depends on its facts. If this happened to you, we can tell you where you stand.
Bring a recent pay stub and tip-out record to a consultation so we can check the workweek.
Suggested meta description: The federal $2.13 tip wage is a cash-wage floor, not the whole paycheck. See when an employer must add pay and why your state may require more.
Internal links: Tip wage and tip pools, Georgia wage claims, Rhode Island wage claims.