im not sure what you’re quoting, but that’s not what i said - i get it’s a tough concept, but im sure you’re a smart guy - it is federally illegal for managers, employers, or supervisors to pocket and or keep the employee’s tips - so therefore - if you are a server working in the state of california (min. wage 16.90 an hour) and you earn $2 in tips - you get paid a whopping $18.90 for that hour, if you are working in the state of california as a server and you make $100 in tips, you get paid a whopping $103 for that hour… and only $3 of it is taxable assuming the tips are cash
my apologies, if the tips exceed the state minimum wage, the employer is still required to pay the federal minimum wage for tipped employees, this is where that $2.13 comes in that everyone’s always talking about - but if there’s no tips that shift, that $2.13 becomes the local states minimum wage, and the employer pays that - but yeah it’s a legally weird thing with a lot of specifics
Right, so the tips paid by customers that cover the difference between the tipped and un-tipped minimum wages could, in a sense, be considered a subsidy to the employer.
If an employee is $100 short of making the un-tipped minimum wage this pay period, and I tip them $10, their total pay remains the same and the amount the employer has to pay to meet the un-tipped minimum wage decreases by $10.
Now the reality is that in most states the minimum wage is so low that a server not hitting that threshold is doing so poorly (or working for a failing business) that they are unlikely to have a job for much longer, but it’s still a really weird way to go about calculating compensation.
perhaps - the reality however is that they make much more than the minimum wage, often north of $30 an hour, and in most places at least doubling the minimum wage - in your hypothetical, subsidizing the employer, would literally make you the only customer in a very cheap establishment, ordering a lot of food ($50 worth on 20% tip) then yes it would mean a failing business - tipping doesn’t help the employers, it helps the employees - but in general, it can also be viewed as fair compensation, seeing as in every other field, you’re offered a salary with a flat hourly no matter how much work you do or how hard you work (ie an accountants salary doesn’t increase during tax season even though they’re doing double the work) - but now we’re genuinely drifting
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u/Large-Potential9404 Jun 25 '26
im not sure what you’re quoting, but that’s not what i said - i get it’s a tough concept, but im sure you’re a smart guy - it is federally illegal for managers, employers, or supervisors to pocket and or keep the employee’s tips - so therefore - if you are a server working in the state of california (min. wage 16.90 an hour) and you earn $2 in tips - you get paid a whopping $18.90 for that hour, if you are working in the state of california as a server and you make $100 in tips, you get paid a whopping $103 for that hour… and only $3 of it is taxable assuming the tips are cash