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SESK: Stuff Everyone Should Know · sesk.info/founder-tipped-cash-wage

If federal tip-credit rules are met, what is the lowest cash wage for a tipped worker?

$2.13 an hour, with the employer making up any shortfall.

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  1. $2.13 an hour ✔
  2. $0, tips can cover all of it
  3. $5.12 an hour

Why: Federal law allows a $2.13 cash wage when all tip-credit rules are met, including making up any shortfall to $7.25. California does not allow employers to count tips toward minimum wage.

Huh, didn't know that: If tips fall short, the employer must make up the difference to reach the minimum wage.

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Why did the waiter get great tips? He always had a lot on his plate.
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References

Answer: $2.13 an hour. Federal law allows a $2.13 cash wage when all tip-credit rules are met, including making up any shortfall to $7.25. California does not allow employers to count tips toward minimum wage.

  1. DOL WHD Fact Sheet 15: Tipped Employees Under the FLSA www.dol.gov/agencies/whd/fact-sheets/15-tipped-employees-flsa
    An employer must pay a tipped worker at least $2.13 per hour under the FLSA.
    Checked 2026-10-11.
  2. California Labor Commissioner: Tips and Gratuities www.dir.ca.gov/dlse/FAQ_TipsAndGratuities.html
    in California an employer cannot use an employee's tips as a credit towards its obligation to pay the minimum wage
    Checked 2026-10-11.

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