Understanding Server Hourly Wage structures in the United States can be complex, varying significantly from state to state and even at the federal level. For individuals working in tipped positions, such as servers in restaurants or bartenders, grasping these wage regulations is crucial for ensuring fair compensation. This guide breaks down the essential aspects of server hourly wages across different jurisdictions, providing a clear overview for both employees and employers.
At the heart of the server wage system lies the concept of the “tipped employee.” Federally, and in many states mirroring this, a tipped employee is someone who regularly receives more than $30 a month in tips. The Fair Labor Standards Act (FLSA) sets the federal minimum wage at $7.25 per hour, but for tipped employees, a different structure applies. The federal minimum cash wage for tipped employees is significantly lower, at $2.13 per hour, with employers allowed to take a “tip credit” of up to $5.12 per hour. This means that the combined wage (cash wage plus tips) must equal at least the standard minimum wage ($7.25 federally). If an employee’s tips do not bring their hourly earnings up to this level, the employer is required to make up the difference.
However, federal law is just the starting point. Many states have enacted their own minimum wage laws, and these often treat tipped employees differently, sometimes more favorably than federal standards. Some states buck the federal system entirely, requiring employers to pay tipped employees the full state minimum wage before tips. These states, as highlighted in the table below, include locations like California, Alaska, and Washington, where servers are guaranteed the same minimum hourly wage as any other worker, in addition to any tips they earn.
Other states operate under a system where they mandate a higher minimum cash wage for tipped employees than the federal $2.13. For example, states like Arizona, Colorado, and Connecticut require employers to pay a higher base cash wage, reducing the amount of tip credit they can claim. This provides a more stable base income for servers, regardless of fluctuations in tip earnings.
It’s also important to note the variations within states. Some states, like Minnesota and Montana, differentiate between large and small employers, setting different minimum wage rates based on business size. Furthermore, certain states like Nevada and Oregon have minimum wages that can vary based on factors like health insurance offerings or regional cost of living adjustments. New York’s regulations are particularly intricate, with wage rates for tipped workers varying by region and job type within the service industry.
For a detailed state-by-state breakdown, the following table provides a comprehensive look at the minimum hourly wages for tipped employees across the US. It outlines the basic combined minimum wage, the maximum tip credit an employer can take, and the minimum cash wage an employer is obligated to pay. Understanding this table is key to deciphering the specific regulations impacting server hourly wage in each jurisdiction.
| Jurisdiction | Basic Combined Cash & Tip Minimum Wage Rate | Maximum Tip Credit Against Minimum Wage | Minimum Cash Wage 1 | Definition of Tipped Employee by Minimum Tips received (monthly unless otherwise specified) |
|---|---|---|---|---|
| FEDERAL: Fair Labor Standards Act (FLSA) | $7.25 | $5.12 | $2.13 | More than $30 |
| State requires employers to pay tipped employees full state minimum wage before tips | ||||
| Alaska | $10.85 | |||
| California: | $15.50 | |||
| Guam | $9.25 | |||
| Minnesota: | ||||
| Large employer 2 | $10.59 | |||
| Small employer 2 | $8.63 | |||
| Montana: | ||||
| Business with gross annual sales over $110,000 | $9.95 | |||
| Business not covered by the Fair Labor Standards Act with gross annual sales of $110,000 or less | $4.00 | |||
| Nevada 10 Employees not offered qualifying health insurance by employer | $11.25 | |||
| Employees offered qualifying health insurance by employer | $10.25 | |||
| Oregon 12 The Oregon minimum wage varies by region. For rates in the Portland metro area and Non-Urban counties, see Minimum wage increase schedule. | $14.20 | |||
| Washington | $15.74 | |||
| State requires employers to pay tipped employees a minimum cash wage above the minimum cash wage required under the federal Fair Labor Standards Act ($2.13/hour) | ||||
| Arizona | $13.85 | $3.00 | $10.85 | Not specified |
| Arkansas | $11.00 | $8.37 | $2.63 | Not specified |
| Colorado | $13.65 | $3.02 | $10.63 | More than $30 |
| Connecticut 14 | $15.00 | |||
| Hotel, restaurant | $8.62 | $6.38 | Not specified | |
| Bartenders who customarily receive tips | $6.77 | $8.23 | ||
| Delaware | $11.75 | $9.52 | $2.23 | More than $30 |
| District of Columbia15 | $17.00 | $9.00 | $8.00 | Not specified |
| Florida 17 | $12.00 | $3.02 | $8.98 | More than $30 |
| Hawaii* | $12.00 | $1.00 | $11.00 | More than $20 |
| *Hawaii: Tip Credit in Hawaii is permissible if the combined amount the employee receives from the employer and in tips is at least $7.00 more than the applicable minimum wage. | ||||
| Idaho | $7.25 | $3.90 | $3.35 | More than $30 |
| Illinois | $13.00 | 40% of the applicable minimum wage ($5.20) | $7.80 | Not specified |
| Iowa | $7.25 | 40% of the applicable minimum wage ($2.90) | $4.35 | More than $30 |
| Maine | $13.80 | 50% of the applicable minimum wage ($6.90) | $6.90 | More than $175 |
| Maryland | $3.63 | More than $30 | ||
| Employer with 15 or more employees | $13.25 | $9.62 | ||
| Employer with 14 or fewer employees19 | $12.80 | $9.17 | ||
| Massachusetts | $15.00 | $8.25 | $6.75 | More than $20 |
| Michigan | $10.10 | $6.26 | 38% of the applicable minimum wage ($3.84) | Not specified |
| Missouri | $12.00 | 50% of the applicable minimum wage ($6.00) | $6.00 | Not specified |
| New Hampshire | $7.25 | 55% of the applicable minimum wage ($3.99) | 45% of the applicable minimum wage ($3.26) | More than $30 |
| New Jersey 3 | $14.13 | $8.87 | $5.26 | More than $30 |
| New Mexico | $12.00 | $9.00 | $3.00 | More than $30 |
| New York | $14.20 | Tipped workers’ minimum wage rates vary by region. For rates in NYC, Long Island, and Westchester, see New York’s Minimum Wage: Overview. | Not specified | |
| Tipped Food Service Workers | $4.75 | $9.45 | ||
| Tipped Service Employees | $2.35 | $11.85 | ||
| North Dakota | $7.25 | 33% of the applicable minimum wage ($2.39) | $4.86 | More than $30 |
| Ohio 5Employers with annual gross receipts of $372,000 or more | $10.10 | $5.05 | $5.05 | More than $30 |
| Oklahoma 6 | $7.25 | $5.12 | $2.13 | Not specified |
| Pennsylvania | $7.25 | $4.42 | $2.83 | $135 per month |
| Rhode Island | $13.00 | $9.11 | $3.89 | More than $30 |
| South Dakota | $10.80 | 50% of the applicable minimum wage ($5.40) | $5.40 | More than $35 |
| Vermont An employee of a hotel, motel, tourist place, or restaurant who customarily and regularly receives more than $120.00 per month in tips for direct and personal customer service. | $13.18 | $6.59 | $6.59 | More than $120 |
| Virgin Islands | $10.50 | $6.30 | 40% of the applicable minimum wage ($4.20) | Not specified |
| Wisconsin 8 | $7.25 | $4.92 | $2.33 | Not specified |
| West Virginia 7 | $8.75 | 70% of the applicable minimum wage ($6.13) | $2.62 | Not specified |
| State minimum cash wage payment is the same as that required under the federal Fair Labor Standards Act ($2.13/hr.) | ||||
| Alabama 9 | $7.25 | $5.12 | $2.13 | More than $30 |
| American Samoa | Special minimum wage rates | $2.13 | More than $30 | |
| Georgia 9 | $7.25 | $5.12 | $2.13 | More than $30 |
| Indiana | $7.25 | $5.12 | $2.13 | More than $30 |
| Kansas 16 | $7.25 | $5.12 | $2.13 | Not specified |
| Kentucky | $7.25 | $5.12 | $2.13 | More than $30 |
| Louisiana 9 | $7.25 | $5.12 | $2.13 | More than $30 |
| Mississippi 9 | $7.25 | $5.12 | $2.13 | More than $30 |
| Nebraska | $10.50 | $8.37 | $2.13 | Not specified |
| North Carolina 4 | $7.25 | $5.12 | $2.13 | More than $20 |
| Commonwealth of the Northern Mariana Islands | $7.25 | $5.12 | $2.13 | More than $30 |
| Puerto Rico 18 | $9.50 | $7.37 | $2.13 | More than $30 |
| South Carolina 9 | $7.25 | $5.12 | $2.13 | More than $30 |
| Tennessee 9 | $7.25 | $5.12 | $2.13 | More than $30 |
| Texas 16 | $7.25 | $5.12 | $2.13 | More than $20 |
| Utah 16 | $7.25 | $5.12 | $2.13 | More than $30 |
| Virginia | $12.00 | $9.87 | $2.13 | More than $30 |
| Wyoming 13 | $7.25 | $5.12 | $2.13 | More than $30 |
Understanding Tip Credit and Minimum Cash Wage
The table highlights two critical components: the “Maximum Tip Credit” and the “Minimum Cash Wage.” The tip credit is the amount an employer can credit towards the standard minimum wage based on the tips received by the employee. The minimum cash wage is the base hourly rate that must be paid directly by the employer, before considering tips. It’s essential to understand that the “Basic Combined Cash & Tip Minimum Wage Rate” often listed is somewhat misleading for tipped employees, as it’s the standard minimum wage that tipped earnings are expected to reach, not a guaranteed server hourly wage paid directly by the employer. The real guaranteed wage is the “Minimum Cash Wage,” supplemented by tips.
State-Specific Regulations and the Future of Server Wages
As you can see from the table, the landscape of server hourly wage is far from uniform. States are increasingly taking action to raise minimum wages, and the treatment of tipped wages is a significant part of this conversation. Movements to eliminate the tip credit and ensure all workers, including servers, receive the full minimum wage are gaining momentum in various parts of the country. Staying informed about these evolving regulations is vital for anyone in the service industry.
This guide and the accompanying table serve as a starting point for understanding the complexities of server hourly wage in the U.S. For the most accurate and up-to-date information, always consult official state labor resources and legal professionals.
