Understanding server minimum wage laws is crucial for both employers in the hospitality industry and service staff across the United States. Unlike the standard minimum wage, the regulations surrounding pay for tipped employees, such as servers, can be complex and vary significantly from state to state. This guide breaks down the Server Minimum Wage By State as of January 1, 2025, providing a comprehensive overview to ensure compliance and understanding.
Decoding the Tipped Minimum Wage System
In the U.S., the Fair Labor Standards Act (FLSA) sets the federal minimum wage, but it also allows for a “tipped minimum wage.” This system permits employers to pay tipped employees a lower direct wage if they earn enough in tips to bring their total hourly compensation to at least the standard minimum wage. The difference between the standard minimum wage and the wage paid to the tipped employee is known as the “tip credit.”
Federal Standard: Under the FLSA, the federal minimum wage is $7.25 per hour. For tipped employees, the federal minimum cash wage is $2.13 per hour, provided that their earned tips make up the $5.12 difference to reach the standard minimum wage. Employees must receive more than $30 per month in tips to be classified as a tipped employee under federal law.
However, state laws can supersede federal regulations, and many states have established their own minimum wage standards for tipped employees, often exceeding the federal requirements. Some states even mandate that tipped employees receive the full state minimum wage before tips, eliminating the tip credit entirely.
State-by-State Server Minimum Wage Breakdown
The following outlines the minimum wage regulations for tipped employees across different states and jurisdictions. It’s categorized to clearly show the varying approaches states take towards server wages.
States Requiring Full Minimum Wage Before Tips
These states do not allow employers to take a tip credit. Servers and other tipped employees in these locations must be paid the full state minimum wage before any tips are considered. This provides a more stable and predictable income for service staff.
- Alaska: $11.91 (Minimum Cash Wage)
- California: $16.50 (Minimum Cash Wage)
- Guam: $9.25 (Minimum Cash Wage)
- Minnesota: $11.13 (Minimum Cash Wage)
- Montana:
- Businesses with gross annual sales over $110,000: $10.55 (Minimum Cash Wage)
- Businesses not covered by FLSA with gross annual sales of $110,000 or less: $4.00 (Minimum Cash Wage)
- Nevada: $12.00 (Minimum Cash Wage)
- Oregon: Varies by region:
- Standard Statewide: $14.70 (Minimum Cash Wage)
- Portland Metro: $15.95 (Minimum Cash Wage)
- Non-urban Counties: $13.70 (Minimum Cash Wage)
- Washington: $16.66 (Minimum Cash Wage)
An overview of minimum hourly wages for tipped employees across different states in the U.S., highlighting the variations in regulations.
States with Higher Minimum Cash Wage Requirements
These states still utilize a tip credit system, but they mandate a minimum cash wage for tipped employees that is higher than the federal minimum of $2.13 per hour. This ensures a larger base pay for servers, even before tips.
- Arizona: $11.70 (Minimum Cash Wage), $14.70 (Basic Combined Cash & Tip Minimum Wage Rate), $3.00 (Maximum Tip Credit)
- Arkansas: $2.63 (Minimum Cash Wage), $11.00 (Basic Combined Cash & Tip Minimum Wage Rate), $8.37 (Maximum Tip Credit)
- Colorado: $11.79 (Minimum Cash Wage), $14.81 (Basic Combined Cash & Tip Minimum Wage Rate), $3.02 (Maximum Tip Credit)
- Connecticut:
- Hotel, Restaurant: $6.38 (Minimum Cash Wage), $16.35 (Basic Combined Cash & Tip Minimum Wage Rate), $9.97 (Maximum Tip Credit)
- Bartenders: $8.23 (Minimum Cash Wage), $16.35 (Basic Combined Cash & Tip Minimum Wage Rate), $8.12 (Maximum Tip Credit)
- Delaware: $2.23 (Minimum Cash Wage), $15.00 (Basic Combined Cash & Tip Minimum Wage Rate), $12.77 (Maximum Tip Credit)
- District of Columbia: $10.00 (Minimum Cash Wage), $17.50 (Basic Combined Cash & Tip Minimum Wage Rate), $7.50 (Maximum Tip Credit)
- Florida: $9.98 (Minimum Cash Wage), $13.00 (Basic Combined Cash & Tip Minimum Wage Rate), $3.02 (Maximum Tip Credit)
- Hawaii: $12.75 (Minimum Cash Wage), $14.00 (Basic Combined Cash & Tip Minimum Wage Rate), $1.25 (Maximum Tip Credit). Note: Tip Credit permissible if combined wage and tips are at least $7.00 more than applicable minimum wage.
- Idaho: $3.35 (Minimum Cash Wage), $7.25 (Basic Combined Cash & Tip Minimum Wage Rate), $3.90 (Maximum Tip Credit)
- Illinois: $9.00 (Minimum Cash Wage), $15.00 (Basic Combined Cash & Tip Minimum Wage Rate), 40% of applicable minimum wage ($6.00) (Maximum Tip Credit)
- Iowa: $4.35 (Minimum Cash Wage), $7.25 (Basic Combined Cash & Tip Minimum Wage Rate), 40% of applicable minimum wage ($2.90) (Maximum Tip Credit)
- Maine: $7.33 (Minimum Cash Wage), $14.65 (Basic Combined Cash & Tip Minimum Wage Rate), 50% of applicable minimum wage ($7.32) (Maximum Tip Credit)
- Maryland: $3.63 (Minimum Cash Wage), $15.00 (Basic Combined Cash & Tip Minimum Wage Rate), $11.37 (Maximum Tip Credit)
- Massachusetts: $6.75 (Minimum Cash Wage), $15.00 (Basic Combined Cash & Tip Minimum Wage Rate), $8.25 (Maximum Tip Credit)
- Michigan: $4.01 (Minimum Cash Wage), $10.56 (Basic Combined Cash & Tip Minimum Wage Rate), $6.55 (Maximum Tip Credit). Note: As of February 21, 2025, Michigan’s minimum wage will increase to $12.48 and minimum cash wage to $5.99.
- Missouri: $6.88 (Minimum Cash Wage), $13.75 (Basic Combined Cash & Tip Minimum Wage Rate), 50% of applicable minimum wage ($6.87) (Maximum Tip Credit)
- New Hampshire: $3.27 (Minimum Cash Wage), $7.25 (Basic Combined Cash & Tip Minimum Wage Rate), $3.98 (Maximum Tip Credit)
- New Jersey: $5.62 (Minimum Cash Wage), $15.49 (Basic Combined Cash & Tip Minimum Wage Rate), $9.87 (Maximum Tip Credit). Note: Lower minimum wage of $14.53/hour for employers with fewer than 6 people and seasonal employees.
- New Mexico: $3.00 (Minimum Cash Wage), $12.00 (Basic Combined Cash & Tip Minimum Wage Rate), $9.00 (Maximum Tip Credit)
- New York:
- NYC, Long Island, & Westchester: $16.50 (Basic Combined Cash & Tip Minimum Wage Rate)
- Remainder of NY State: $15.50 (Basic Combined Cash & Tip Minimum Wage Rate)
- Tipped workers’ minimum wage rates vary by region and type of employer. Refer to New York’s Minimum Wage Overview.
- North Dakota: $4.86 (Minimum Cash Wage), $7.25 (Basic Combined Cash & Tip Minimum Wage Rate), 33% of applicable minimum wage ($2.39) (Maximum Tip Credit)
- Ohio: (Employers with annual gross receipts of $394,000 or more) $5.35 (Minimum Cash Wage), $10.70 (Basic Combined Cash & Tip Minimum Wage Rate), $5.35 (Maximum Tip Credit). Note: For smaller employers, state minimum wage is $7.25/hour.
- Pennsylvania: $2.83 (Minimum Cash Wage), $7.25 (Basic Combined Cash & Tip Minimum Wage Rate), $4.42 (Maximum Tip Credit)
- Rhode Island: $3.89 (Minimum Cash Wage), $15.00 (Basic Combined Cash & Tip Minimum Wage Rate), $11.11 (Maximum Tip Credit)
- South Dakota: $5.75 (Minimum Cash Wage), $11.50 (Basic Combined Cash & Tip Minimum Wage Rate), 50% of applicable minimum wage ($5.75) (Maximum Tip Credit)
- Vermont: $7.01 (Minimum Cash Wage), $14.01 (Basic Combined Cash & Tip Minimum Wage Rate), $7.00 (Maximum Tip Credit)
- Virgin Islands: $4.20 (Minimum Cash Wage), $10.50 (Basic Combined Cash & Tip Minimum Wage Rate), $6.30 (Maximum Tip Credit)
- Wisconsin: $2.33 (Minimum Cash Wage), $7.25 (Basic Combined Cash & Tip Minimum Wage Rate), $4.92 (Maximum Tip Credit). Note: Opportunity employee (under 20, first 90 days) cash wage can be $2.13/hour, minimum wage $5.90/hour.
- West Virginia: $2.62 (Minimum Cash Wage), $8.75 (Basic Combined Cash & Tip Minimum Wage Rate), 70% of applicable minimum wage ($6.13) (Maximum Tip Credit). Note: State law applies to employers with 6+ employees and state agencies.
A sample of the federal minimum wage poster, often required to be displayed in workplaces to inform employees of their rights.
States Following Federal Minimum Cash Wage
These states default to the federal minimum cash wage of $2.13 per hour for tipped employees, relying on the federal tip credit system.
- Alabama
- American Samoa (Special minimum wage rates apply)
- Georgia (Note: Georgia has a state minimum wage law, but it does not apply to tipped employees.)
- Indiana
- Kansas (Note: State law excludes FLSA-covered employment.)
- Kentucky
- Louisiana
- Mississippi
- Nebraska: $2.13 (Minimum Cash Wage), $12.00 (Basic Combined Cash & Tip Minimum Wage Rate), $9.87 (Maximum Tip Credit)
- North Carolina: $2.13 (Minimum Cash Wage), $7.25 (Basic Combined Cash & Tip Minimum Wage Rate), $5.12 (Maximum Tip Credit). Note: Tip credit requires signed employee certification of tips received.
- Commonwealth of the Northern Mariana Islands
- Oklahoma: $2.13 (Minimum Cash Wage), $7.25 (Basic Combined Cash & Tip Minimum Wage Rate), $5.12 (Maximum Tip Credit). Note: Lower minimum rate for very small businesses not covered by FLSA.
- Puerto Rico: $2.13 (Minimum Cash Wage), $10.50 (Basic Combined Cash & Tip Minimum Wage Rate), $8.37 (Maximum Tip Credit)
- South Carolina
- Tennessee
- Texas (Note: State law excludes FLSA-covered employment.)
- Utah (Note: State law excludes FLSA-covered employment.)
- Virginia: $2.13 (Minimum Cash Wage), $12.41 (Basic Combined Cash & Tip Minimum Wage Rate), $10.28 (Maximum Tip Credit)
- Wyoming: $2.13 (Minimum Cash Wage), $7.25 (Basic Combined Cash & Tip Minimum Wage Rate), $5.12 (Maximum Tip Credit). Note: Wyoming’s state minimum wage is $5.15/hour, but employers must pay federal minimum wage if applicable.
Important Considerations for Servers and Employers
- Tip Pooling: Many establishments utilize tip pooling or sharing arrangements. These are generally legal, but regulations can vary by state. It’s important to understand the specific rules in your location.
- Employer Obligations: Employers must ensure that tipped employees earn at least the minimum wage when tips are combined with their cash wage. If an employee’s tips do not bring them up to the required minimum, the employer is obligated to make up the difference.
- State and Local Laws: Always consult the specific labor laws for your state and locality. Some cities and counties may have minimum wages that exceed state levels.
- Record Keeping: Employers are required to maintain accurate records of wages paid and tips received by employees to demonstrate compliance with minimum wage laws.
Conclusion: Navigating Server Minimum Wage
Server minimum wage laws are not uniform across the United States. Understanding the specific regulations in your state is essential for both servers and employers to ensure fair pay and legal compliance. This guide provides a starting point, but always refer to official state labor resources for the most up-to-date and detailed information. As minimum wage laws are subject to change, staying informed is crucial for all stakeholders in the restaurant and service industries.
Footnotes & References (as per original document)
1 Other additional deductions are permitted, for example for meals and lodging.
2 Connecticut. The Connecticut minimum wage is adjusted annually based on a set formula.
3 District of Columbia. The minimum cash wage for tipped workers in the District of Columbia increased to $10.00 per hour on July 1, 2024, and it is scheduled to gradually increase annually until it reaches the full minimum wage. Additionally, the District of Columbia minimum wage is adjusted annually on July 1 based on a set formula.
4 Florida. The Florida minimum wage is scheduled to increase by $1.00 every year on September 30th until reaching $15.00 on September 30, 2026.
5 Michigan. On February 21, 2025, the Michigan minimum wage will increase to $12.48 and the minimum cash wage will increase to 48% of the applicable minimum wage ($5.99)
6 New Jersey. An employer is eligible to apply a tip credit against the full state minimum hourly wage only if the tipped employees have been informed in advance of the amount of the cash wage that is to be paid; the amount of the tip credit claimed by the employer; that all tips received must be retained by the employee, except in case of a valid tip pool arrangement limited to tipped employees; and of the requirements of the relevant New Jersey regulations. There is a minimum wage of $14.53 per hour for employers who employ fewer than 6 people and employees engaged in seasonal employment.
7 Ohio. For employees of employers with gross annual sales of less than $394,000, the state minimum wage is $7.25 per hour.
8 Oklahoma. For employers with fewer than 10 full-time employees at any one location who have gross annual sales of $100,000 or less, the basic minimum rate is $2.00 per hour. Employers with ten or more full time employees at any one location or annual gross sales over $100,000 that are not covered by the FLSA can take a tip credit of no more than 50 percent ($3.62) of the applicable minimum wage of $7.25. The State law excludes from coverage any employment that is subject to the federal Fair Labor Standards Act.
9 Wisconsin. A cash wage of $2.13 per hour may be paid to an opportunity employee -– an employee who is not yet 20 years old and who has been in employment status with a particular employer for 90 or fewer consecutive calendar days from the date of initial employment — who is a tipped employee. (The minimum wage for opportunity employees is $5.90 per hour.)
10 West Virginia. The state minimum wage law applies only to employers with six or more employees and to state agencies.
11 The following states do not have state minimum wage laws: Alabama, Louisiana, Mississippi, South Carolina, and Tennessee. Georgia has a state minimum wage law, but it does not apply to tipped employees. Employers in these states must pay employees covered by the Federal Fair Labor Standards Act at least the federal minimum wage.
12 The minimum wage laws in Kansas, Oklahoma, Texas, and Utah exclude from coverage any employment that is subject to the federal Fair Labor Standards Act.
13 North Carolina. Tip credit is not permitted unless the employer obtains from each employee, either monthly or each pay period, a signed certification of the amount of tips received. Employers must notify employees in advance of the amount of cash wages they will be paid and the amount that wages will be increased using the tip credit.
14 Wyoming. The Wyoming minimum wage is $5.15 per hour. Employers must pay employees covered by the federal Fair Labor Standards Act at least the federal minimum wage.
Prepared By:
Division of Fair Labor Standards Act and Child Labor
Wage and Hour Division
U.S. Department of Labor
This document was last revised January 1, 2025.
Disclaimer: This information is for informational purposes only and does not constitute legal advice. Consult with a legal professional for advice tailored to your specific situation.
