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Sterling Employment Law

Michigan employee rights when a portion of wages come from tips

The minimum wage law in Michigan and whether or not workers are receiving what they are supposed to can be difficult to understand if a portion of the workers' pay is based on tips. The Workforce Opportunity Wage Act gives employers the right to consider tips as part of an employee's wages if the situation calls for it. This is applicable if the employee regularly and customarily is accorded tips. It is important to know the conditions for when it is allowable for an employer to take a tip credit based on the minimum wage.

An employee must be in a position in which it is customary and they will regularly receive tips from patrons, customers or guests for the services that the employee provides. Examples would be a waitress or waiter, a maid in a hotel, or a person who works as a parking valet. If the tips that are received in addition to the minimum hourly wage are not in excess or equal to the minimum wage that is required by the law, the employer must pay the worker to make up for the shortfall to reach the minimum wage.

The employee must be aware of the minimum wage law and how it works. If the employee receives credit for tips, the employment record must note how much credit was taken for every pay period. This will be signed by the employee and it will be dated prior to the date in which he or she received the paycheck. The minimum wage rate as of September 1, 2014 was $8.15 in hourly pay. A tipped employee is required to receive $3.10 per hour with $5.05 in tips per hour. As of January 16, 2016, the minimum hourly wage rate will be $8.50. The tipped employee minimum wage at that time will be $3.23 per hour with $5.27 reported tips per hour.

It is possible for a tipped employee to be victimized by unpaid overtime violations. If a tipped employee does not receive 1.5 times what the regular rate is, this is a violation. Workers who make a portion of the income via tips might not realize they have certain rights when it comes to their wages. Those who believe they have been treated wrongly and illegally must have a grasp of their employee rights by speaking to a legal professional about a wage claim.

Source: Michigan.gov, "MIOSHA Fact Sheet -- Tipped Employees," accessed on Nov. 24, 2015

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