When the U.S Dept of Labor states “If an employee’s tips combined with the employers direct wages do not equal the minimum hourly wage, the employer must make up the difference”, it only applies to the work week, not just the day you failed to make minimum wage.
(Federal min wage )$7.25 x 7 = $50.75. (daily) or $7.25 x 30 hrs = $217.50 (weekly) In Santa Fe, for example if you worked 30 hours, you must have earned at least $307.50 for the week combining tips and wage. $2.13 +$7.73 (tip credit) = $10.25. If not, the employer must reimburse you. (The Santa Fe City living wage law is rarely enforced by City Officials for tipped workers)
Overtime on subminimum wages is determined by multiplying the employee’s regular rate of pay by 1.5 and then by subtracting the hourly tip credit. The employee’s regular rate of pay can never be less than the full applicable minimum wage rate. Example $7.25(Fed min wage rate or applicable min wage rate) x 1.5 minus $5.12 (Tip Credit) = overtime hourly rate for servers who receive sub minimum wages.
Vacation pay is considered a “Benefit” and not covered or enforced by Federal/state wage and hour laws. You can file a discrimination case, however, if your employer elects to only provide vacation pay to employees of a certain ethnic background or gender who perform the same job.
WAGE DEDUCTIONS:
The following ways a employer can legally deduct or reduce a servers cash wage or tips include:
requiring servers to contribute to a tip pool
deducting a percentage from a server’s credit card tips to cover the cost of credit card processing fee.*Some states prohibit this
Tip Credit
Taxes-such as FICA, State
Any other deductions must be approved by you first
WAGE THEFT
The three most common ways a employer may illegally deduct or reduce a servers wage include:
Requiring tipped employees who receive a sub minimum wage to participate in a invalid or illegal tip pool. For example, a tipped employee is forced to share tips with non-tipped workers such as dishwasher, cooks, and janitors. These workers usually are not required to report these tips but you may still end up paying income taxes. For more info search: FLSA fact sheet #15 for tipped employees. The Department of Labor just released a revised version of the Fair Labor Standards Act Fact sheet#15 for tipped employees March, 2011.
