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Minimum wage for standard workers and tipped workers

Minimum wage is a hot topic recently, from New Jersey to California, and it's important for people to know that these wages can be set at both the state and the federal level. The federal government can set a baseline, and then the states can set their own regulations, which must at least be as high as the federal level; if they're higher, employers have to follow the state's regulations.

The level is set differently for tipped workers and normal hourly workers. For those who do not get tips, the level of pay is set at $7.25 per hour. This was established back in 2009 and it is still in place today.

For tipped workers, though, the lowest they can be paid is $2.13 per hour. Again, some states have higher limits for this, but all states are bound to pay at least this much.

However, it's important to note that tipped workers will not actually be paid only $2.13 per hour. The employer has to look at the amount made in tips and average it out. If the $2.13 plus the tips gives an average of $7.25, the employer only has to pay the $2.13—the tips make up the rest. If the worker didn't earn an average of $7.25, though, the employer then has to pay more until the worker is getting the full $7.25.

Because of the way this is set up, all workers are entitled to the same minimum wage in any industry, with the difference simply being if that money is paid from the employer or from the customers directly. Be sure you know how much you are supposed to be paid and what you can do if your employer does not pay enough.

Source: U.S. Department of Labor, "Handy Reference Guide to the Fair Labor Standards Act," accessed July 23, 2015

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