Do Servers Get Minimum Wage? Tipped Minimum Wage by State
Do servers get minimum wage?
Yes. If tips fall short, the restaurant has to make up the difference. A federal regulation says so in plain words.
Last updated: 5 November 2026 · Figures and rules in this post are current as of this date.
But the question hides a number. Sixteen states let a restaurant pay a server just $2.13 an hour in cash. Texas is one of them.
We laid the law next to the government's own wage data, and one line stopped us.
In Louisiana, the Bureau of Labor Statistics estimates the median hourly pay for waiters, tips included, at $7.25.
That is the federal minimum wage. The same number.
Half of Louisiana's servers earn that much or less. Once you read the regulation, the number starts to make sense.
As of Nov. 5, 2026. Legal rates come from the U.S. Department of Labor table effective July 1, 2026, which we opened on Nov. 5. Wages come from BLS estimates published for May 2025. The two are not the same moment in time, and we explain why below.
Do servers get minimum wage if customers don't tip?
Yes. Under federal rules a server must end up with at least the minimum wage, and when tips fall short the employer pays the balance.
Start with how the federal $7.25 is built. It comes in two pieces.
- $2.13 is the cash wage the restaurant pays directly, per hour.
- $5.12 is the "tip credit": the part of the minimum wage the law lets tips count toward.
Divide $5.12 by $7.25 and you get 70.6%. At the federal level, tips are allowed to cover 70.6% of the minimum wage.
Source: U.S. Department of Labor, Wage and Hour Division, "Minimum Wages for Tipped Employees, by State," edition effective July 1, 2026 — federal agency page, kept current by the agency.
https://www.dol.gov/agencies/whd/state/minimum-wage/tipped
What if tips don't reach $5.12? The regulation answers directly.
"If the employee received less than the maximum tip credit amount in tips, the employer is required to pay the balance so that the employee receives at least the minimum wage with the defined combination of wages and tips."
Source: eCFR, 29 CFR § 531.59(b), current as of Nov. 3, 2026 — federal regulation text.
https://www.ecfr.gov/current/title-29/section-531.59
Tips are not added on top of a server's income. They go first toward filling the minimum wage.
Short of the line, the restaurant covers the gap. Over the line, the server keeps the excess.
The employer has a duty too. To take the credit, it must tell the employee in advance what the cash wage is and how much the credit adds. An employee who was not told cannot be paid under the credit.
Source: 29 CFR § 531.59 (same as above) — federal regulation text.
What about customers? We found no provision in the sources we read that requires a customer to tip. The law addresses the restaurant.
Tipped minimum wage by state: what does each state require?
The legal cash wage a restaurant must pay a tipped server runs from $2.13 in 16 states to $17.13 in Washington. That is a gap of 8.0 times.
The Labor Department sorts states into three groups.
- Seven states ban the tip credit: Alaska, California, Minnesota, Montana, Nevada, Oregon and Washington. The restaurant pays the full state minimum in cash.
- States whose cash wage is above the federal $2.13.
- States that use the federal $2.13.
We did not trust the group labels. We sorted by the actual cash-wage number. DOL files Oklahoma under "higher than federal," yet its cash wage in the table is $2.13. By the number, 16 states pay $2.13 in cash: Alabama, Georgia, Indiana, Kansas, Kentucky, Louisiana, Mississippi, Nebraska, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Utah, Virginia and Wyoming.
They employ 736,500 waiters. That is 32.4% of the country's waiters, about one in three.
Here is the full table for all 50 states and DC. Find your state, then read across.
| State | Combined minimum wage | Tip credit | Legal cash wage | Median hourly, tips included | Bottom 10%, tips included |
|---|---|---|---|---|---|
| Alabama | $7.25 | $5.12 | $2.13 | $12.91 | $7.96 |
| Alaska | no credit | none | $14.00 | $12.65 | $11.91 |
| Arizona | $15.15 | $3.00 | $12.15 | $21.13 | $14.70 |
| Arkansas | $11.00 | $8.37 | $2.63 | $11.86 | $11.08 |
| California | no credit | none | $16.90 | $17.35 | $16.50 |
| Colorado | $15.16 | $3.02 | $12.14 | $21.57 | $14.81 |
| Connecticut | $16.94 | $10.56 | $6.38 | $18.16 | $16.35 |
| Delaware | $15.00 | $12.77 | $2.23 | $17.73 | $15.00 |
| District of Columbia | $18.40 | $8.10 | $10.30 | $23.01 | $17.50 |
| Florida | $14.00 † | $3.02 † | $10.98 † | $17.38 | $13.09 |
| Georgia | $7.25 | $5.12 | $2.13 | $8.99 | $7.25 |
| Hawaii | $16.00 | $1.25 | $14.75 | $29.99 | $14.00 |
| Idaho | $7.25 | $3.90 | $3.35 | $14.45 | $8.06 |
| Illinois | $15.00 | $6.00 | $9.00 | $15.00 | $15.00 |
| Indiana | $7.25 | $5.12 | $2.13 | $13.69 | $8.48 |
| Iowa | $7.25 | $2.90 | $4.35 | $10.10 | $7.25 |
| Kansas | $7.25 | $5.12 | $2.13 | $17.36 | $8.35 |
| Kentucky | $7.25 | $5.12 | $2.13 | $14.26 | $7.94 |
| Louisiana | $7.25 | $5.12 | $2.13 | $7.25 | $7.25 |
| Maine | $15.10 | $7.55 | $7.55 | $20.85 | $14.66 |
| Maryland | $15.00 | $11.37 | $3.63 | $17.67 | $15.00 |
| Massachusetts | $15.00 | $8.25 | $6.75 | $18.49 | $15.29 |
| Michigan | $13.73 | $8.24 | $5.49 | $18.16 | $12.48 |
| Minnesota | no credit | none | $11.41 | $12.25 | $11.13 |
| Mississippi | $7.25 | $5.12 | $2.13 | $10.27 | $7.37 |
| Missouri | $15.00 | $7.50 | $7.50 | $14.13 | $13.75 |
| Montana | no credit | none | $10.85 | $11.23 | $10.55 |
| Nebraska | $15.00 | $12.87 | $2.13 | $16.24 | $13.50 |
| Nevada | no credit | none | $12.00 | $12.70 | $12.00 |
| New Hampshire | $7.25 | $3.98 | $3.27 | $18.48 | $10.12 |
| New Jersey | $15.92 | $9.87 | $6.05 | $21.62 | $15.49 |
| New Mexico | $12.00 | $9.00 | $3.00 | $17.75 | $12.82 |
| New York | $17.00 NYC area / $16.00 rest of state | not listed by DOL | not listed by DOL | $22.61 | $16.12 |
| North Carolina | $7.25 | $5.12 | $2.13 | $15.46 | $8.24 |
| North Dakota | $7.25 | $2.39 | $4.86 | $14.85 | $8.88 |
| Ohio | $11.00 | $5.50 | $5.50 | $17.65 | $11.45 |
| Oklahoma | $7.25 | $5.12 | $2.13 | $8.61 | $7.32 |
| Oregon | no credit | none | $15.55 | $23.27 | $15.00 |
| Pennsylvania | $7.25 | $4.42 | $2.83 | $16.68 | $8.85 |
| Rhode Island | $16.00 | $12.11 | $3.89 | $17.03 | $15.00 |
| South Carolina | $7.25 | $5.12 | $2.13 | $8.83 | $7.25 |
| South Dakota | $11.85 | $5.92 | $5.93 | $13.94 | $13.00 |
| Tennessee | $7.25 | $5.12 | $2.13 | $13.35 | $7.25 |
| Texas | $7.25 | $5.12 | $2.13 | $11.18 | $8.21 |
| Utah | $7.25 | $5.12 | $2.13 | $14.98 | $8.92 |
| Vermont | $14.42 | $7.21 | $7.21 | $28.43 | $14.28 |
| Virginia | $12.77 | $10.64 | $2.13 | $21.52 | $13.59 |
| Washington | no credit | none | $17.13 | $26.98 | $17.65 |
| West Virginia | $8.75 | $6.13 | $2.62 | $17.01 | $9.73 |
| Wisconsin | $7.25 | $4.92 | $2.33 | $14.26 | $8.09 |
| Wyoming | $7.25 | $5.12 | $2.13 | $11.50 | $8.66 |
Legal columns: DOL table effective July 1, 2026. Wage columns: BLS OEWS estimates for waiters and waitresses (SOC 35-3031), which include tips and are a three-year model estimate, not a single-day snapshot. Where DOL's table listed several rates, we used these: Montana, the rate for businesses over $110,000 in annual sales; Oregon, the standard rate (Portland area $16.80, nonurban $14.55); Connecticut, the hotel and restaurant rate (bartenders $8.23); Ohio, the rate for employers with annual receipts of $405,000 or more.
† Florida's row is stale. See the Florida section below.
New York: DOL's table lists the regular minimum wage ($17.00 for NYC, Long Island and Westchester; $16.00 elsewhere) but leaves the tip credit and cash wage blank. We did not fill them in.
Washington, D.C.: the table shows $10.30. Press reports we saw only in search summaries say the D.C. Council voted 7-5 on July 28, 2025 to amend Initiative 82 rather than repeal it, with a phased schedule. We did not verify what D.C. pays today beyond DOL's figure.
Source: DOL/WHD tipped-minimum-wage table (above), transcribed by us on Nov. 5, 2026; BLS Occupational Employment and Wage Statistics (OEWS), May 2025 estimates, occupation 35-3031, pulled through the BLS public API — federal agency data.
https://www.dol.gov/agencies/whd/state/minimum-wage/tipped
https://www.bls.gov/oes/
Do servers get minimum wage in Texas, Florida, California or New York?
In every one of them, yes. What differs is how much of it the restaurant pays in cash.
Texas
Texas uses the federal numbers: a $2.13 cash wage and a $5.12 tip credit, for a $7.25 combined minimum. If a server's tips fall short of the credit, the employer owes the balance.
Texas has 199,610 waiters. BLS puts their median hourly pay, tips included, at $11.18, and the bottom 10% at $8.21.
Florida
DOL's table, effective July 1, 2026, lists a $14.00 combined minimum, a $3.02 tip credit and a $10.98 cash wage. Florida's waiters number 207,180. Median pay with tips is $17.38; the bottom 10% is at $13.09.
That table has already aged. We found out the same day we opened it.
Footnote 4 of DOL's own table says Florida's minimum wage rises $1.00 every September 30 "until reaching $15.00 on September 30, 2026." Today is Nov. 5, 2026. The table body still shows $14.00.
Local news and a law firm (both secondary sources) report that since Sept. 30, 2026 Florida's minimum wage is $15.00 and the tipped cash wage is $11.98, with the credit unchanged at $3.02. The $11.98 is consistent with $15.00 minus $3.02. We could not open an official state notice. And we did not check any other state for changes after July 1.
Source: DOL/WHD table, footnote 4 (above); Jacksonville Today, Sept. 29, 2026; Lowndes law firm client alert, Sept. 2, 2026 — the last two are secondary sources, and we did not open the official FloridaCommerce notice.
https://jaxtoday.org/2026/09/29/floridas-minimum-wage-increases-to-15-on-wednesday/
https://www.lowndes-law.com/newsroom/insights/floridas-minimum-wage-reaches-15-00-on-september-30-2026
California and Washington
Both ban the tip credit. A server's cash wage is the full state minimum: $16.90 in California and $17.13 in Washington. Tips are on top.
California has 229,970 waiters, with a median of $17.35. Washington has 45,400, with a median of $26.98.
New York
New York has 142,940 waiters and a BLS median of $22.61. As for the legal tipped cash wage, DOL's table gives no figure, so we give none.
Michigan, Ohio, Colorado, Illinois
Michigan shows a $5.49 cash wage, Ohio $5.50, Colorado $12.14 and Illinois $9.00. All four are in the table above. We did not check city rules such as those in Chicago or Denver.
What do servers actually earn once tips are counted?
In some states, not much more than the minimum wage. Using BLS estimates, the bottom 10% of servers in Georgia, Louisiana, South Carolina, Tennessee and Iowa earn $7.25 an hour, tips included. Louisiana's median is $7.25 too.
Before putting these numbers next to the law, we checked one thing. Do BLS wage figures include tips? If not, $7.25 would tell us nothing.
We opened the BLS Handbook of Methods. The sentence defining wages ends like this:
"Base rate pay; cost-of-living allowances; guaranteed pay; hazardous-duty pay; incentive pay, including commissions and production bonuses; and tips are included."
Source: BLS Handbook of Methods, "OEWS Concepts," last modified Sept. 24, 2026 — federal agency documentation.
https://www.bls.gov/opub/hom/oews/concepts.htm
Tips are in. The comparison holds.
Nationally, BLS counts 2,270,910 waiters and waitresses. Mean pay is $19.26 an hour, the median is $16.94, and the bottom 10% is at $8.70. At that level nothing looks odd.
Split it by state and it does.
The median runs from $29.99 in Hawaii to $7.25 in Louisiana, a gap of 4.1 times.
| State | Legal cash wage | Bottom 10% | Median |
|---|---|---|---|
| Georgia | $2.13 | $7.25 | $8.99 |
| Louisiana | $2.13 | $7.25 | $7.25 |
| South Carolina | $2.13 | $7.25 | $8.83 |
| Tennessee | $2.13 | $7.25 | $13.35 |
| Iowa | $4.35 | $7.25 | $10.10 |
Tips are counted in those figures, and the bottom still lands on the legal minimum.
This fits how the regulation works. When tips are thin, the restaurant tops up to the legal minimum, and the combined figure stops at that line. That is our reading. These data do not prove it.
These five states also avoid one problem we describe below. The federal minimum wage has been $7.25 since 2009. A state at $7.25 today could not have been below it during the past three years.
Source: Congressional Research Service, "The Tip Credit Provisions of the FLSA: In Brief" (R43445), March 19, 2015 — congressional research report.
https://www.everycrsreport.com/reports/R43445.html
Nine states have a bottom 10% under $8.00. The five above, plus Oklahoma at $7.32, Mississippi at $7.37, Kentucky at $7.94 and Alabama at $7.96.
Then there is Louisiana.
Louisiana has 33,870 waiters. The median is the pay of the person in the middle, so half of them earn $7.25 or less. The mean is $10.75.
The legal cash wage does not predict the real wage. Virginia and Louisiana both have a $2.13 cash wage. Virginia's median is $21.52. Louisiana's is $7.25.
Virginia's combined minimum is $12.77, and $10.64 of that is tip credit. The share left for tips to fill is about twice Louisiana's $5.12. These data cannot say whether that gap produces the pay gap.
Does a second dataset agree? What Treasury's tax data show
Roughly, yes. In tax-return data in a Treasury rule, reported tips made up 63.5% of the pay of waiters who reported tips. The most the federal tip credit allows is 70.6%.
On April 13, 2026, the Federal Register published Treasury's final rule T.D. 10044. It lists the occupations that qualify for the new tip deduction. Attached to it is Table A, built from tax year 2023 returns of people with a single job.
We looked twice at the occupation code. For wait staff it is SOC 35-3031. That is the same code BLS uses.
| Value | What it is | |
|---|---|---|
| Largest share of the minimum wage tips may cover | 70.6% | $5.12 ÷ $7.25, federal regulation |
| Reported tips ÷ wage compensation, wait staff | 63.5% | Treasury Table A, tax year 2023, tax returns |
One number comes from a statute's arithmetic. The other comes from returns people filed. They land a little more than 7 percentage points apart. And 63.5% is real filing data, not a model estimate.
Source: Treasury/IRS final rule T.D. 10044 (91 FR 19026), Table A, April 13, 2026 — federal document, rule text read in full.
https://www.federalregister.gov/documents/2026/04/13/2026-07104/occupations-that-customarily-and-regularly-received-tips-definition-of-qualified-tips
This figure is easy to misread, so here is its definition. It does not say 63.5% of a waiter's income is tips. It covers only waiters who reported tips. The denominator is W-2 box 1 plus unreported tips on Form 4137. The table counts single-job holders only and leaves out independent contractors.
In the same table, 74.5% of wait staff had at least $100 in reported tips, and wait staff account for 34.3% of all reported tips. Bartenders (SOC 35-3011) show 63.4%.
The two numbers do not measure the same thing. One is a legal maximum; the other is what filers reported. Still, two independent routes ended up in similar territory, which points toward tips playing about the part this legal structure gives them.
And 70.6% is just the federal figure. Some states lean on tips far more.
| State | Combined minimum | Tip credit | Share filled by tips |
|---|---|---|---|
| Nebraska | $15.00 | $12.87 | 85.8% |
| Delaware | $15.00 | $12.77 | 85.1% |
| Virginia | $12.77 | $10.64 | 83.3% |
| Arkansas | $11.00 | $8.37 | 76.1% |
| Federal | $7.25 | $5.12 | 70.6% |
Nebraska's cash wage is the federal $2.13, but its combined minimum is $15.00. The law there leans on tips for most of the wage.
Does banning the tip credit raise server pay?
Not in this data. The median of state medians for servers in the seven no-credit states is $12.70. For the $2.13 states it is $13.35.
That surprised us, because we had assumed the opposite. We built the table expecting no-credit states to come out ahead.
| Group | States | Median of state medians | Lowest state | Highest state |
|---|---|---|---|---|
| No tip credit | 7 | $12.70 | Montana $11.23 | Washington $26.98 |
| Cash wage above $2.13 | 29 | $17.67 | Oklahoma $8.61 | Hawaii $29.99 |
| Cash wage $2.13 | 15 | $13.35 | Louisiana $7.25 | Virginia $21.52 |
Groups follow DOL's table. DOL puts Oklahoma in the middle group, so it is counted there.
The no-credit group sits below the $2.13 group. Montana ($11.23), Minnesota ($12.25), Alaska ($12.65) and Nevada ($12.70) belong to it. Within the group, Montana and Washington are 2.4 times apart.
We will not claim the reverse either. Cost of living, state minimum wage levels and restaurant markets all differ, and these data cannot separate them from the tip rules.
Here is what we can say. The legal floor for servers varies eightfold by state, and what servers actually earn varies 4.1-fold. In 16 states the restaurant pays $2.13 an hour in cash, and the customers pay the rest. In the bottom of the range, tips don't add to income. They fill up to the minimum wage and stop.
How far can you trust these numbers?
The direction holds. "Exactly $7.25" and "law versus pay at the same moment" do not. Five reasons.
1. The lowest wage range has no floor. When an employer reports a range instead of an exact rate, BLS sorts it into one of 12 ranges. The lowest is "under $9.25 an hour." Our story lives in that open bottom. Read $7.25 as "the federal minimum wage level," not as a figure exact to the cent.
Source: BLS Handbook of Methods, "OEWS Concepts," last modified Sept. 24, 2026 — federal agency documentation.
https://www.bls.gov/opub/hom/oews/concepts.htm
2. "May 2025" is not a single moment. BLS builds each estimate by combining six semiannual survey panels collected over three years with a model it calls MB3. For May 2025 the panels run from November 2022 through May 2025. Establishments that did not respond are filled in from about 10 similar employers.
Many states raised their minimum wage in those three years. So you cannot treat legal rate and pay as same-date numbers. Look at Florida: the bottom 10% is $13.09, under today's $14.00 legal minimum. Colorado ($14.81 versus $15.16) and Arizona ($14.70 versus $15.15) show the same pattern. Three-year pooling may be one reason. These data cannot isolate the cause.
Source: BLS OEWS Technical Note for May 2025 estimates, last modified May 15, 2026; BLS Handbook of Methods, "Calculation" — federal agency documentation stating the MB3 model and the three-year panels.
https://www.bls.gov/news.release/ocwage.tn.htm
3. We use hourly pay only. BLS annual wages are hourly pay multiplied by 2,080 hours. Many waiters work part time, so that is not a real annual income.
4. Unreported cash tips are unknown. OEWS is an employer survey. We found no BLS statement on how tips workers did not report are treated. In its own studies the IRS once estimated that 52% of 2006 tip income went unreported. That is a 20-year-old estimate and says nothing about today. So we never write "this is all they earn."
Source: Treasury Inspector General for Tax Administration, Ref. 2018-30-081, Sept. 28, 2018 — federal audit report citing an IRS estimate for tax year 2006.
https://www.oversight.gov/sites/default/files/oig-reports/201830081fr.pdf
5. Some rows have problems of their own. New York has no tip credit or cash wage in DOL's table. Oklahoma sits in the wrong DOL group. And Florida's row is stale, as shown above.
Why is the tipped cash wage still $2.13?
The cash wage became $2.13 in 1991, and Congress froze it on August 20, 1996. Both dates are right. They are different events.
Some accounts say 1996 set the figure. The statute doesn't say that.
Before 1996, the cash wage moved with the minimum wage. In CRS's table:
| Year | Minimum wage | Employer cash wage |
|---|---|---|
| 1967 | $1.40 | $0.70 |
| 1978 | $2.65 | $1.33 |
| 1980 | $3.10 | $1.86 |
| 1990 | $3.80 | $2.09 |
| 1991 | $4.25 | $2.13 |
On August 20, 1996, Public Law 104-188, section 2105, changed the rule. The cash wage must be at least the amount "required to be paid such an employee on the date of the enactment of this paragraph." The number $2.13 does not appear in the text. The law pinned the cash wage to its enactment-day amount, and that amount was $2.13.
After that, only the minimum wage moved. $4.75 in 1996, $5.15 in 1997, $5.85 in 2007, $6.55 in 2008, $7.25 in 2009. The tip credit grew from $2.62 to $3.02, $3.72, $4.42 and finally $5.12.
DOL's 2026 table still lists the federal cash wage at $2.13. Congress first created the tip credit in 1966.
Source: CRS R43445 (March 19, 2015) — table amounts; Public Law 104-188, section 2105(b), signed Aug. 20, 1996 — statute text.
https://www.everycrsreport.com/reports/R43445.html
https://www.govinfo.gov/content/pkg/PLAW-104publ188/html/PLAW-104publ188.htm
Why Congress switched from a percentage to a fixed amount, we did not confirm. The result is documented. The minimum wage went from $4.25 to $7.25, the restaurant's cash burden stayed put, and the tip credit absorbed the difference.
What changed lately: No Tax on Tips, the 80/20 rule and tip theft
Three things moved. No Tax on Tips deducts up to $25,000 a year of tip income from income tax for tax years 2025 through 2028. A 2021 80/20 rule was struck down in 2024. And since 2018, employers and managers can't keep employees' tips.
No Tax on Tips
It is a deduction, not an exemption. Income tax falls; Social Security and Medicare (FICA) taxes do not. The deduction is Internal Revenue Code section 224, created by the One Big Beautiful Bill Act.
- The cap is $25,000 a year, regardless of filing type.
- The deduction shrinks once modified adjusted gross income passes $150,000 ($300,000 for joint filers).
- It covers tax years 2025 through 2028. It does not apply to years that begin after Dec. 31, 2028.
- It applies to occupations that customarily and regularly received tips before Dec. 31, 2024. Treasury's list has more than 70 occupations in eight categories. Wait staff (TTOC 102) and bartenders (TTOC 101) are on it.
- "Cash tips" include cash, checks, credit and debit cards, and mobile payments.
- Automatic gratuities and service charges don't qualify. Treasury says a customer's only choice with an automatic gratuity is whether to patronize the business, citing the IRS's long-held position (Rev. Rul. 2012-18). A customer's extra amount chosen freely on top can qualify.
- You need a valid Social Security number. Married couples must file jointly. Employees in specified service trades or businesses are excluded. The tips must appear on a W-2, a 1099 or Form 4137.
Source: Treasury/IRS final rule T.D. 10044 (91 FR 19026), April 13, 2026; IRS news release IR-2026-49, April 10, 2026 — federal documents.
https://www.federalregister.gov/documents/2026/04/13/2026-07104/occupations-that-customarily-and-regularly-received-tips-definition-of-qualified-tips
https://www.irs.gov/newsroom/treasury-irs-issue-final-regulations-listing-occupations-where-workers-customarily-and-regularly-receive-tips-under-the-one-big-beautiful-bill
We could not confirm how fast the deduction shrinks above the income threshold, so we leave that out. We also found no primary source on how many tipped workers benefit.
The older reporting rules still apply. A worker who gets $20 or more in cash tips in a month must report them to the employer in writing by the 10th of the next month. Tips not reported go on Form 4137, with Social Security and Medicare tax. Large food and beverage establishments file Form 8027, and if reported tips run under 8% of gross receipts, the shortfall is allocated among tipped employees.
Source: IRS Topic No. 761, "Tip Income," updated Oct. 12, 2026; IRS Fact Sheet FS-2022-37 — federal agency guidance.
https://www.irs.gov/taxtopics/tc761
https://www.irs.gov/newsroom/tip-income-is-taxable-and-must-be-reported
The 80/20 rule
Judges Elrod, Graves and Ashe of the Fifth Circuit had a dispute over a Labor Department rule to settle. On Aug. 23, 2024, in Restaurant Law Center v. DOL (No. 23-50562), they vacated it.
The 2021 rule split a server's work into tip-producing work, directly supporting work and non-tipped work. If directly supporting work, such as setting tables, ran past 20% of the workweek, or past 30 consecutive minutes at a time, the employer lost the tip credit for that excess time.
The panel held the rule contrary to the statute's text and arbitrary and capricious. The 1967 regulation, the court wrote, envisioned "two unrelated and separate occupations," and "dual really means dual."
DOL's tips page dates the vacatur Oct. 29, 2024. The opinion is dated Aug. 23, 2024. We could not find out why the dates differ. In December 2024, DOL restored the original dual-jobs regulation, 29 CFR 531.56(e) (89 FR 101887). We know its present text only through search summaries: no tip credit for time spent in a separate non-tipped occupation, and related duties inside the tipped job treated as part of it. We found no 2026 DOL tip-credit rulemaking.
Source: Fifth Circuit opinion, Restaurant Law Center v. DOL, No. 23-50562, Aug. 23, 2024 — court opinion, read; DOL/WHD Tips page — agency page, dates as stated there.
https://www.ca5.uscourts.gov/opinions/pub/23/23-50562-CV0.pdf
https://www.dol.gov/agencies/whd/flsa/tips
Tip theft
The Consolidated Appropriations Act, 2018 (Public Law 115-141, signed March 23, 2018) added FLSA section 3(m)(2)(B): "An employer may not keep tips received by its employees for any purposes, including allowing managers or supervisors to keep any portion of employees' tips." It applies whether or not the employer takes a tip credit. Civil penalties reach $1,100 per violation, adjusted for inflation.
Source: Federal Register, 84 FR 53976, Oct. 8, 2019; 29 U.S.C. § 203(m)(2)(B) — federal rulemaking notice and statute.
https://www.govinfo.gov/content/pkg/FR-2019-10-08/html/2019-20868.htm
How much do Americans actually tip?
The law sets no tip percentage. We found no provision in what we read that does. The familiar 15-to-20% range is custom. It comes from surveys and travel guides, not from a statute.
Two surveys give a feel for the custom. Their questions are worded differently, so we report them separately and do not compare them.
- Pew Research Center (fielded Aug. 7-27, 2023; 11,945 U.S. adults): 92% of people who eat at sit-down restaurants say they always or often leave a tip. For an average meal, 57% say they tip 15% or less, and about a quarter say 20% or more.
- Bankrate/YouGov (fielded April 23-25, 2025; 2,277 adults): 70% of sit-down restaurant-goers say they always tip servers, and 35% say they typically tip 20% or more.
Source: Pew Research Center, "Tipping Culture in America," Nov. 9, 2023; Bankrate press release, June 4, 2025 — survey results, not law.
https://www.pewresearch.org/social-trends/2023/11/09/tipping-culture-in-america-public-sees-a-changed-landscape/
https://www.bankrate.com/press-releases/63-of-americans-have-a-negative-view-about-tipping-with-41-saying-tipping-culture-has-gotten-out-of-control/
We don't tell anyone how much to tip. This post shows how the money is treated in the law and the data.
Frequently asked questions
Q. Do servers get minimum wage in Texas?
A. Yes. Texas uses the federal figures: a $2.13 cash wage plus up to a $5.12 tip credit, for a $7.25 combined minimum. If tips fall short of the credit, the employer owes the balance. BLS estimates Texas waiters' median pay with tips at $11.18.
Q. Do servers get minimum wage in Florida?
A. Yes. DOL's table effective July 1, 2026 shows a $14.00 combined minimum and a $10.98 cash wage. Its own footnote says the minimum reaches $15.00 on Sept. 30, 2026, and secondary sources report an $11.98 tipped cash wage from that date. We did not open an official state notice.
Q. Do servers get minimum wage in California?
A. Yes. California bans the tip credit. The cash wage is the full state minimum, $16.90 in DOL's July 1, 2026 table, and tips come on top.
Q. What is the tipped minimum wage in New York?
A. DOL's table lists a $17.00 minimum for NYC, Long Island and Westchester and $16.00 elsewhere, but gives no tip credit or cash wage amounts. We do not state one.
Q. What is the federal tipped minimum wage?
A. $2.13 an hour in cash, with up to $5.12 in tip credit, for a $7.25 minimum. The cash wage has been $2.13 since 1991 and was frozen by statute on Aug. 20, 1996.
Q. Can my employer keep my tips?
A. No. Since 2018, an employer may not keep employees' tips for any purpose, including letting managers or supervisors keep a share. It applies whether or not a tip credit is taken.
Q. Is "No Tax on Tips" really tax free?
A. No. It is an income-tax deduction of up to $25,000 a year for tax years 2025 through 2028. Social Security and Medicare (FICA) taxes still apply.
Q. Are automatic gratuities and service charges qualified tips under No Tax on Tips?
A. No. Treasury's final rule excludes them. A customer's additional amount chosen freely on top can qualify. How labor law treats them, we did not confirm.
Q. Is the 80/20 tip rule still in effect?
A. The 2021 version was vacated by the Fifth Circuit on Aug. 23, 2024 (DOL's page says Oct. 29, 2024). DOL restored the original dual-jobs regulation, 29 CFR 531.56(e), in December 2024.
Before you tip or take a shift, check one thing
If you eat out, find your state in the table above and read its legal cash wage. That is what the restaurant itself owes a server per hour where you are. What you do at the bottom of the check is yours to decide.
If you work for tips, the regulation requires your employer to tell you in advance about the cash wage and the tip credit. A worker who was not told cannot be paid under the credit.
This post summarizes laws and data we checked. It is not legal or tax advice. For your own situation, check with the Department of Labor, the IRS or a qualified professional.
Not confirmed
- A provision requiring a customer to tip.
- How BLS treats cash tips that workers don't report in its wage statistics.
- A Labor Department tally of tip-credit violations. We found the enforcement dataset (WHD Compliance Action Data) but did not download or analyze it. A widely repeated restaurant violation rate reached us only second-hand, and we found no original DOL document, so we did not use it. National back-wage totals for restaurants were not confirmed either.
- Legal changes after July 1, 2026. We checked Florida only, through secondary sources, and did not open an official notice.
- What Washington, D.C. pays today after the 2025 changes to Initiative 82. We have DOL's $10.30 figure only.
- City rules such as those in Chicago, Denver or New York City.
- How quickly the No Tax on Tips deduction shrinks above the income threshold.
- Why Congress changed the cash wage from a percentage to a fixed amount in 1996.
- Why DOL dates the 80/20 vacatur Oct. 29, 2024 when the court opinion is dated Aug. 23, 2024.
- Default tip percentages on payment terminals, and how often large parties are auto-charged a gratuity.
- A tipped New York cash wage. DOL's table has none.
Sources
- DOL/WHD, Minimum Wages for Tipped Employees, by State (effective July 1, 2026): https://www.dol.gov/agencies/whd/state/minimum-wage/tipped
- BLS OEWS, May 2025 (SOC 35-3031): https://www.bls.gov/oes/
- 29 CFR § 531.59 (eCFR, current as of Nov. 3, 2026): https://www.ecfr.gov/current/title-29/section-531.59
- BLS Handbook of Methods, OEWS Concepts: https://www.bls.gov/opub/hom/oews/concepts.htm
- BLS OEWS Technical Note: https://www.bls.gov/news.release/ocwage.tn.htm
- CRS R43445: https://www.everycrsreport.com/reports/R43445.html
- Public Law 104-188: https://www.govinfo.gov/content/pkg/PLAW-104publ188/html/PLAW-104publ188.htm
- Treasury T.D. 10044 (91 FR 19026): https://www.federalregister.gov/documents/2026/04/13/2026-07104/occupations-that-customarily-and-regularly-received-tips-definition-of-qualified-tips
- IRS IR-2026-49: https://www.irs.gov/newsroom/treasury-irs-issue-final-regulations-listing-occupations-where-workers-customarily-and-regularly-receive-tips-under-the-one-big-beautiful-bill
- IRS Topic No. 761: https://www.irs.gov/taxtopics/tc761
- IRS Fact Sheet FS-2022-37: https://www.irs.gov/newsroom/tip-income-is-taxable-and-must-be-reported
- TIGTA 2018-30-081: https://www.oversight.gov/sites/default/files/oig-reports/201830081fr.pdf
- Fifth Circuit, No. 23-50562: https://www.ca5.uscourts.gov/opinions/pub/23/23-50562-CV0.pdf
- DOL/WHD Tips: https://www.dol.gov/agencies/whd/flsa/tips
- Federal Register, 84 FR 53976: https://www.govinfo.gov/content/pkg/FR-2019-10-08/html/2019-20868.htm
- Pew Research Center: https://www.pewresearch.org/social-trends/2023/11/09/tipping-culture-in-america-public-sees-a-changed-landscape/
- Bankrate: https://www.bankrate.com/press-releases/63-of-americans-have-a-negative-view-about-tipping-with-41-saying-tipping-culture-has-gotten-out-of-control/
- Jacksonville Today: https://jaxtoday.org/2026/09/29/floridas-minimum-wage-increases-to-15-on-wednesday/
- Lowndes: https://www.lowndes-law.com/newsroom/insights/floridas-minimum-wage-reaches-15-00-on-september-30-2026
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