Understanding Server Minimum Wage across the United States can be complex, as it varies significantly by state and depends on federal regulations regarding tipped employees. This guide breaks down the minimum cash wage and tip credit laws for servers in each state as of January 1, 2025, based on data from the U.S. Department of Labor.
Federal vs. State Minimum Wage for Tipped Employees
The Fair Labor Standards Act (FLSA) sets the federal minimum wage at $7.25 per hour. For tipped employees, the federal minimum cash wage is considerably lower at $2.13 per hour, provided that the employee’s tips bring their total hourly wage up to at least the federal minimum wage. The employer can then claim a tip credit of up to $5.12 per hour. An employee is considered “tipped” under federal law if they regularly receive more than $30 per month in tips.
However, many states have enacted their own minimum wage laws, and these can differ greatly from the federal standards. In some states, the state minimum wage is higher than the federal minimum wage, and some states have eliminated the tip credit altogether, requiring employers to pay tipped employees the full state minimum wage before tips.
States Requiring Full Minimum Wage Before Tips
A growing number of states believe that all work should be compensated with at least the standard minimum wage before considering tips. These states do not allow employers to take a tip credit, meaning servers and bartenders are entitled to the same minimum wage as any other employee, on top of the tips they receive. As of January 1, 2025, these states and territories include:
- Alaska: With a strong stance on worker compensation, Alaska mandates a full minimum wage for all employees, including tipped staff. The minimum cash wage for servers here is $11.91 per hour.
- California: Known for its progressive labor laws, California also requires employers to pay the full state minimum wage to tipped employees. As of 2025, servers in California must receive a minimum cash wage of $16.50 per hour.
- Guam: Following similar principles, Guam ensures tipped employees receive the full minimum wage, setting their minimum cash wage at $9.25 per hour.
- Minnesota: Minnesota is another state that does not permit a tip credit. Servers here are guaranteed a minimum cash wage of $11.13 per hour.
- Montana: Montana’s regulations depend on business size. For larger businesses (gross annual sales over $110,000), the minimum cash wage is $10.55 per hour. Smaller businesses not covered by FLSA have a lower minimum cash wage.
- Nevada: In Nevada, employers must also pay tipped employees the full state minimum wage. The minimum cash wage for servers in Nevada is $12.00 per hour.
- Oregon: Oregon features a regional minimum wage system, but across all regions, tipped employees are paid the full minimum wage. This translates to a minimum cash wage of $14.70 (standard statewide), $15.95 (Portland metro), and $13.70 (non-urban counties) per hour.
- Washington: Leading the way in minimum wage standards, Washington requires employers to pay tipped employees the highest minimum wage in the nation. Servers here must be paid a minimum cash wage of $16.66 per hour.
These states prioritize a stable base income for service staff, recognizing that tips can fluctuate and should be considered additional income, not a substitute for a fair wage.
States with Tip Credit and Lower Cash Wage
The majority of states still utilize the tip credit system, allowing employers to pay a lower minimum cash wage to tipped employees. However, many of these states mandate a minimum cash wage that is higher than the federal minimum of $2.13 per hour. Here’s a breakdown of these states:
- Arizona: Arizona’s minimum wage laws stipulate a minimum combined cash and tip wage of $14.70, with a maximum tip credit of $3.00, resulting in a minimum cash wage of $11.70 per hour.
- Arkansas: Arkansas sets a minimum combined wage of $11.00, allowing a significant tip credit of $8.37, leading to a lower minimum cash wage of $2.63 per hour.
- Colorado: Colorado’s minimum combined wage is $14.81, with a tip credit of $3.02, establishing a minimum cash wage of $11.79 per hour.
- Connecticut: Connecticut has a complex system with different rates for hotel and restaurant staff and bartenders. For hotel and restaurant staff, the minimum cash wage is $6.38, and for bartenders, it is $8.23 per hour.
- Delaware: Delaware’s minimum combined wage is $15.00, with a substantial tip credit of $12.77, resulting in a minimum cash wage of $2.23 per hour.
- District of Columbia: The District of Columbia is gradually phasing out the tip credit. Currently, the minimum combined wage is $17.50, with a tip credit of $7.50, and a minimum cash wage of $10.00 per hour.
- Florida: Florida’s minimum combined wage is $13.00, with a tip credit of $3.02, leading to a minimum cash wage of $9.98 per hour. Florida’s minimum wage is scheduled to increase annually until it reaches $15.00 in 2026.
- Hawaii: Hawaii employs a unique approach, allowing a tip credit only if the combined wage and tips exceed the standard minimum wage by $7.00. The minimum cash wage here is $12.75 per hour.
- Idaho: Idaho aligns with the federal minimum combined wage of $7.25, allowing a tip credit of $3.90, resulting in a minimum cash wage of $3.35 per hour.
- Illinois: Illinois has a minimum combined wage of $15.00, with a tip credit capped at 40% of the minimum wage ($6.00), leading to a minimum cash wage of $9.00 per hour.
- Iowa: Iowa matches the federal minimum combined wage at $7.25, with a 40% tip credit ($2.90), resulting in a minimum cash wage of $4.35 per hour.
- Maine: Maine’s minimum combined wage is $14.65, with a 50% tip credit ($7.32), setting the minimum cash wage at $7.33 per hour.
- Maryland: Maryland’s minimum combined wage is $15.00, with a tip credit of $11.37, leading to a minimum cash wage of $3.63 per hour.
- Massachusetts: Massachusetts has a minimum combined wage of $15.00, with a tip credit of $8.25, resulting in a minimum cash wage of $6.75 per hour.
- Michigan: Michigan’s minimum combined wage is $10.56, with a tip credit of $6.55, leading to a minimum cash wage of $4.01 per hour. Michigan’s minimum wage is set to increase in February 2025.
- Missouri: Missouri’s minimum combined wage is $13.75, with a 50% tip credit ($6.87), resulting in a minimum cash wage of $6.88 per hour.
- New Hampshire: New Hampshire mirrors the federal minimum combined wage of $7.25, with a tip credit of $3.98, and a minimum cash wage of $3.27 per hour.
- New Jersey: New Jersey’s minimum combined wage is $15.49, with a tip credit of $9.87, leading to a minimum cash wage of $5.62 per hour. Note that New Jersey has a slightly lower minimum wage for businesses with fewer than 6 employees and seasonal employment.
- New Mexico: New Mexico has a minimum combined wage of $12.00, with a significant tip credit of $9.00, resulting in a minimum cash wage of $3.00 per hour.
- New York: New York’s minimum wage varies by region. For NYC, Long Island, & Westchester it is $16.50, and for the remainder of NY state, it is $15.50. Tipped worker minimum wages also vary by region and type of employer. Consult New York’s official resources for detailed information.
- North Dakota: North Dakota matches the federal minimum combined wage of $7.25, with a 33% tip credit ($2.39), resulting in a minimum cash wage of $4.86 per hour.
- Ohio: Ohio has different minimum wage rates based on employer size. For larger employers (annual gross receipts of $394,000 or more), the minimum combined wage is $10.70, with a 50% tip credit ($5.35), and a minimum cash wage of $5.35 per hour. Smaller employers follow the federal minimum wage.
- Oklahoma: Oklahoma generally follows the federal minimum combined wage of $7.25, with a tip credit of $5.12, resulting in a minimum cash wage of $2.13 per hour. Smaller businesses may have even lower minimum wage requirements.
- Pennsylvania: Pennsylvania’s minimum combined wage is $7.25, with a tip credit of $4.42, leading to a minimum cash wage of $2.83 per hour.
- Rhode Island: Rhode Island’s minimum combined wage is $15.00, with a tip credit of $11.11, resulting in a minimum cash wage of $3.89 per hour.
- South Dakota: South Dakota has a minimum combined wage of $11.50, with a 50% tip credit ($5.75), setting the minimum cash wage at $5.75 per hour.
- Vermont: Vermont’s minimum combined wage is $14.01, with a tip credit of $7.00, resulting in a minimum cash wage of $7.01 per hour.
- Virgin Islands: The Virgin Islands have a minimum combined wage of $10.50, with a tip credit of $6.30, leading to a minimum cash wage of $4.20 per hour.
- Wisconsin: Wisconsin aligns with the federal minimum combined wage of $7.25, with a tip credit of $4.92, and a minimum cash wage of $2.33 per hour. Wisconsin also has a lower “opportunity wage” for employees under 20 in their first 90 days of employment.
- West Virginia: West Virginia’s minimum combined wage is $8.75, with a tip credit of $6.13, resulting in a minimum cash wage of $2.62 per hour. West Virginia’s minimum wage law applies only to larger employers.
These states attempt to balance providing a base wage while acknowledging the role of tips in server income. The specific regulations and amounts vary widely, highlighting the need for servers and employers to understand their local laws.
States Matching Federal Minimum Cash Wage
A handful of states default to the federal minimum cash wage of $2.13 per hour for tipped employees, combined with the federal minimum combined wage of $7.25. These states include:
- Alabama
- Georgia (Georgia has a minimum wage law, but it does not apply to tipped employees)
- Indiana
- Kansas (Kansas law excludes employment subject to FLSA)
- Kentucky
- Louisiana
- Mississippi
- Nebraska
- North Carolina
- Commonwealth of the Northern Mariana Islands
- Oklahoma (for larger employers not covered by FLSA. Smaller employers may have even lower minimums)
- Puerto Rico
- South Carolina
- Tennessee
- Texas (Texas law excludes employment subject to FLSA)
- Utah (Utah law excludes employment subject to FLSA)
- Virginia
- Wyoming (Wyoming’s state minimum wage is $5.15/hr, but employers must pay federal minimum to FLSA-covered employees)
- American Samoa
In these states, servers heavily rely on tips to reach a livable wage, as the base cash wage is minimal and set at the lowest federally allowed level.
Key Considerations and Footnotes Explained
It’s crucial to note several additional factors that can influence server minimum wage:
- Local Minimum Wages: Some cities and counties may have minimum wages that are higher than the state minimum wage. Servers should always check local ordinances in their area.
- Subminimum Wages: Some states allow for subminimum wages for specific categories of workers, such as minors, students, or new hires in training. These are not detailed in this overview but may apply in certain situations.
- Tip Pooling: Many restaurants utilize tip pooling or tip sharing arrangements, where tips are collected and redistributed among staff. Regulations regarding tip pools vary, but generally, they must be fair and transparent.
- Deductions: Employers may be permitted to take deductions from wages for items like meals or lodging, which can affect the actual take-home pay of servers.
Footnotes from the original data provide further important details:
- [1] Besides tip credits, other deductions like those for meals and lodging are also permitted under federal and some state laws.
- [2] Connecticut: Connecticut’s minimum wage is adjusted annually based on a pre-set formula, ensuring wages keep pace with economic changes.
- [3] District of Columbia: The District of Columbia is in the process of increasing the minimum cash wage for tipped workers to eventually match the full minimum wage, reflecting a move towards eliminating the tip credit.
- [4] Florida: Florida’s minimum wage is on a scheduled increase of $1.00 per year until it reaches $15.00 in September 2026, offering a clear path to higher wages for servers in the coming years.
- [5] Michigan: Michigan’s minimum wage and minimum cash wage for tipped employees are set to increase on February 21, 2025, indicating an upcoming wage boost for Michigan servers.
- [6] New Jersey: New Jersey law emphasizes transparency regarding tip credits, requiring employers to fully inform tipped employees about cash wages, tip credits, tip retention policies, and relevant regulations. There’s also a different minimum wage for smaller employers in New Jersey.
- [7] Ohio: Ohio’s minimum wage rules differ based on the employer’s annual gross sales, highlighting that minimum wage laws can be nuanced based on business size.
- [8] Oklahoma: Oklahoma has complex rules based on business size and FLSA coverage, with potential for lower minimum wages for very small businesses.
- [9] Wisconsin: Wisconsin allows a lower cash wage for “opportunity employees” (younger and newer workers) who are tipped employees, illustrating exceptions for certain worker categories.
- [10] West Virginia: West Virginia’s minimum wage law applies only to employers with 6 or more employees and state agencies, meaning smaller businesses might not be subject to the state minimum wage.
- [11] Alabama, Louisiana, Mississippi, South Carolina, and Tennessee: These states do not have state minimum wage laws and default to the federal minimum wage for covered employees. Georgia’s state minimum wage law does not cover tipped employees.
- [12] Kansas, Oklahoma, Texas, and Utah: Minimum wage laws in these states exclude jobs covered by the federal Fair Labor Standards Act, potentially leading to reliance on the federal minimum wage.
- [13] North Carolina: North Carolina has specific requirements for tip credits, including mandatory signed certifications of tip amounts from employees and advance notification of wage structures.
- [14] Wyoming: Wyoming’s state minimum wage is below the federal level, but employers must pay the federal minimum wage to employees covered by the FLSA.
Disclaimer: This information is for informational purposes only and is based on data available as of January 1, 2025. Minimum wage laws are subject to change. Always consult official state labor offices for the most up-to-date and accurate information.
Prepared By:
Content Creator at rental-server.net, utilizing data from the Division of Fair Labor Standards Act and Child Labor, Wage and Hour Division, U.S. Department of Labor.
