Eliminating Two-Tiered Minimum Wages for Tipped Workers Can Reduce Poverty and Inequality

Eliminating Two-Tiered Minimum Wages for Tipped Workers Can Reduce Poverty and Inequality

Under the Fair Labor Standards Act, employers can pay tipped workers just $2.13 an hour in cash wages if their tips add up to the federal minimum wage of $7.25. But this practice leaves many tipped workers vulnerable to exploitation and abuse.

Note: Some states have different minimum wage scales based on region, sector, or employer size. This chart shows the lowest minimum cash wage that tipped workers could earn in the state. In New York State, for example, tipped workers' minimum wage rates vary by region. This chart shows the lowest minimum cash wage ($8.80), which applies to food service workers outside of New York City and Nassau, Suffolk and Westchester counties.
Source: U.S. Department of Labor, Wage and Hour Division (last revised January 1, 2022).