The employee is in a field where the pay rate is much higher. For example, a middle manager who also has responsibility over a programmer might be paid less depending on their skill level. It is a particularly tight labor market. Either for that position, the region or just an overarching problem.

Employees are entitled to an employer-paid wage of at least $2.13 per hour, more if tips received do not total $5.12 an hour (based on the current minimum wage of $7.25). This means employers can claim what is called a " tip credit " of up to $5.12 against the federal minimum wage, as outlined by section 3(m) of the FLSA.

Under Wyoming law, employers with tipped employees must pay at least $2.13 per hour, provided the employees’ pay equals at least the applicable minimum hourly wage when combined with the tips they receive during a given pay period.

Minimum Wage for Employees Who Receive Tips If your employees regularly earn tips from customers, you might be able to pay them less than the minimum wage, Federal law allows employers to pay a special hourly rate to tipped workers, as long as they earn enough in tips to make at least minimum wage for each hour worked.

Credit Cards: Where tips are charged on a credit card and the employer must pay the credit card company a percentage on each sale, the employer may pay the employee the tip, less that percentage. For example, where a credit card company charges an employer 3 percent on all sales charged to its credit service, the employer may pay the tipped employee 97 percent of the tips without violating the FLSA.

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As Republicans stonewall President Obama’s initiative to raise the federal minimum wage from $7.25 an hour to $10.10 an hour by 2016, some state lawmakers have taken the matter into their own.

Employees who receive tips of less than $20 in a calendar month aren’t required to report their tips to you but must report these amounts as income on their tax returns and pay taxes, if any. Topic No. 761 Tips – Withholding and Reporting | Internal Revenue Service

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