Home / Blog / Overtime Law and Minimum Wage Violations / Knowing more about Wisconsin’s tip credit law

Knowing more about Wisconsin’s tip credit law

Posted on December 24, 2014 2:25 pm under Overtime Law and Minimum Wage Violations

Several employees in the service industry, such as those working in the adult entertainment sector, are considered ‘tipped employees.’ The Fair Labor Standards Act (FLSA) defines tipped employees as those who customarily and regularly receive tips, or those who receive tips greater than occasional but less than constant.

Although tips basically belong to employees, some states, including Wisconsin, allow the employers to have tip credits. Tip crediting occurs when an employer counts a worker’s tip towards its minimum wage obligation. For employees receiving tips as part of their wage, here are some reminders to ensure that no wage violations are being committed:

  • Employers should not be included in a tip pool or any tip sharing arrangement
  • Employers are not allowed to hold or retain employees’ tips for purposes other than satisfying minimum wage obligation
  • Workers should never receive compensation lower than the minimum wage, which means if the employer-paid wage and the tips do not add up to the minimum, employers must pay for the difference
  • All details about the tip crediting and pooling should be made known to the affected employees, either orally or in writing

Tipped workers in the adult entertainment sector are most vulnerable to employer exploitation, including wage violations.  If any of these have not been satisfied, a lawyer at Habush Habush & Rottier S.C. ® is willing to look into your situation to see if any wage violation has been committed. Call our Wisconsin office at (414) 271-0900 to know more about your situation.