Minimum wage laws vary greatly from state to state, and can even vary from industry to industry. No state can pay less than the federal minimum wage, but states can, and many do, pay more.
First, a disclaimer: Although I am an attorney, the legal information in this podcast is not intended to be a substitute for seeking personalized legal advice from an attorney licensed to practice in your jurisdiction. Further, I do not intend to create an attorney-client relationship with any listener.
Today’s topic is minimum wage. Rob from New York wrote:
The restaurant that I work for in New York City was paying tipped employees $4.60 an hour. They recently lowered our wages to $2.10 an hour claiming that "Tipped employees that make more than $7.00 an hour in tips will be paid $2.10 an hour not $4.60." Do they have [th legal right to do this?
Great question, Rob. It seems that you are correct, and that your employer must pay you at least $4.60 per hour.
The first minimum wage law in the United States took effect in 1938, and required employers to pay to each of their employees who is engaged in commerce or in the production of goods for commerce wages at the following rates—(1) not less than $1 an hour.” Most recently, in 1997, Congress increased the minimum wage to $5.15 per hour. The issue is under debate in Washington now, but no single bill has been passed by both the House and the Senate.
The original law provided the $1 wage and also included reasonable costs of food or lodging provided by the employer. So, if the employer fed and housed you, the employer could effectively deduct this cost rather than paying the full $1 wage.
Today, a similar policy applies to tips. Under federal law, most employers of a tipped employee are only required to pay $2.13 an hour in direct wages if that amount plus the tips received equals at least the federal minimum wage. If an employee’s tips combined with the employer’s direct wages of at least $2.13 an hour do not equal the federal minimum hourly wage, the employer must make up the difference (1).