Frequently Asked Questions about Tipped Employees in Ohio
If you work in Ohio, chances are that you work a traditionally tipped position, such as a waiter, driver, bartender, or hotel service assistant, amongst many others. Often, tips take up a large portion of one’s wages. Here are some answers to frequently asked questions about tipping employees in Ohio.
Tipped employees are those who regularly earn at least $30 monthly through tips. This does not include the hourly wages they are paid by their employer.
Is Minimum Wage Different for Tipped Employees in Ohio?
According to the Fair Labor Standards Act, an employer in Ohio may pay tipped employees less than minimum wage. This is only the case if the total earned from tips and hourly wages equates to the full amount a worker would have earned if they received minimum wage for every hour worked. Tips can be used to cover part of an employee’s minimum wage as long as an employee’s total annual income is not less than $19,344. Employers may supplement up to 50% of minimum wage with tips. In 2022, this equates to as low as $4.65.
What Counts as a Tip?
Tips are optional or extra payments that a customer determines and pays the employees, either in cash or through electronic payment. These may be based on service quality or overall experience.
What is Tip Credit?
Tip credit is used by employers to supplement a part of an employee’s minimum wage using the tips they earn. This is not a deduction from an employee’s pay. Instead, the tips work as credit for the employer’s obligation to pay. In Ohio, an employer can claim a tip credit for up to $2.85 per hour.
Related: Tipped Employee Rights
Who Does Tip Credit Apply To?
According to the U.S. Department of Labor, the tip credit is only applicable to tipped employees. As long as the employee’s tipped work was not done for a substantial amount of time, then the applied hours can safely be supplemented. A substantial amount of time is considered to be when the employer supplements the wages for anything more than 20% of the employee’s hours worked during the workweek, or if tip credit is taken from a continuous period of time longer than 30 minutes.
How Much Can a Tipped Employee’s Wages be Reduced?
While the minimum wage in Ohio is $7.25, according to the Fair Labor Standards Act, a tipped employee may receive less than that amount if their pay is subsidized by the amount they earn through tips.
Are Employees Required to Be a Part of a Tip Pool?
Tip-pooling may be an arrangement that employers create with their tipped employees. Using tip pools, all the tip money generated during a shift would be pooled together and redistributed to all of the tipped employees working at that time. This could be beneficial in accounting for any disparity in tip-earning positions.
This is by no means mandatory and is an arrangement agreed upon beforehand between the employees and their employer.
How do I File a Report for Wage Theft or Withholding Tips?
In order to file a report for wage theft or withheld tips in Ohio, fill out the minimum wage complaint form and mail it to the Ohio Department of Commerce. The instructions for how to complete the form and where to send it are included. Incomplete forms will be returned.
Related: Ohio Wage & Hour FAQs
While working as a tipped employee comes with its benefits, as it allows patrons to show their gratitude toward good service, it also comes with its complexities. Workers that receive tips as compensation have a different hours and wage rights. Some questions you may have in mind could be whether or not you count as a tipped employee, whether your wages are different, or whether tip credit applies to you.
In general, employers are allowed to substitute 50% of your minimum wage with the money you earn through tips, which equates to about $4.65 in Ohio. Some alternatives to tipping may include tipping pools, though this must be arranged with your employer beforehand.
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If you or a loved one would like to learn more about Ohio Tipped Employees FAQs, get your free consultation with one of our Employment Attorneys in Ohio today!