As of January 1st, 2018, the hourly minimum wage for servers in Florida is $5.23 before tip income is included. Additionally, maximum tip credit against the minimum wage of $3.02 is allowed in the State of Florida.
This practically means that you, as a “tipped worker,” are guaranteed the State of Florida minimum wage of $8.25 per hour. When days are slow, your employer is required to increase cash wages to compensate to the amount required by the general minimum wage. This practice is called “topping up.”
Who Are “Tipped Employees?“
In terms of the Fair Labor Standards Act (FLSA) tipped employees are defined as the workers who regularly receive at least $30 in tip income per month. This regular income was the motive for lawmakers to introduce a different standard of reduced minimum wages for certain category of workers.
Tips are the property of the employee. Employers are prohibited to use an employees tip as anything else other than as a “tip credit“ against its minimum wage obligation to the employee, or as an advancement of a valid tip pool for all workers.
In order for an employer to take a tip credit towards its minimum wage obligation for tipped employees ($5.23 in Florida), under Section 3(m) of the FLSA, the employer must provide oral or written notice to tipped employees informing them of the use of tip credit in advance.
If the employer fails to provide obligatory information to its tipped workers, tip credit cannot be used. In that case, the employer would be obligated to pay the state minimum wage of $8.25 per hour, and allow the tipped employee to keep all tips received.
Are Tips Taxable?
Yes. All tips are taxable as they are considered wages under the law, and like all income, the tips are subject to FICA (the Federal Income Contribution Act) taxes. These are the federal income tax, social security, and Medicare taxes. It’s your responsibility to report tip income to the employer and to IRS for income taxing purposes.
Working Overtime as a Server in Florida
The FLSA requires employers to pay extra wages to employees who work more than 40 hours a week. General overtime calculation is rather simple – regular hourly wage x 1.5 x number of hours worked overtime. With tipped wages things complicate due to aforementioned specifics of servers salary.
We will now make this calculation based on State of Florida minimum wage standards, which are applicable to tipped employees as well:
- First, we calculate general overtime pay based on the minimum wage in Florida, so it’s $8.25 x 1.5 = $12.37
- Next, we deduce the workers hourly tip credit, which is in this case $3.02, from the general overtime amount: $12.37 – $3.02 = $9.35
- We calculate the number of overtime hours worked and multiply it by employee’s overtime hourly wage: e.g.10 hours overtime x $9.35 = $93.5
- Remember that the workers hourly tip credit of 3.02 is still due in case that you did not receive any tip during your overtime work
Schedule a free consultation with The law offices of Eddie Marban
If you believe that you suffered a violation of your tipped minimum or overtime wage, or if you simply want to know more about your labor rights, feel free to schedule a free consultation, and we will make sure to assess the merits of the claim and provide guidance and representation in further proceedings.
Law Offices of Eddy Marban has more than 30 years of experience handling and litigating employment cases, and have represented thousands of clients in various labor law related issues in trial and appellate courts. Let our experience guide you!