CashoutTipped minimum wage / Tennessee
Tennessee tipped minimum wage
What employers must pay
In Tennessee, the minimum wage is $7.25 an hour. An employer can pay a tipped employee as little as $2.13 an hour in cash, as long as tips bring the total to at least $7.25. The difference, $5.12, is the tip credit.
Tennessee has no state minimum wage law, so the federal $7.25 and $2.13 tipped cash wage apply to covered employers.
Who counts as a tipped employee: more than $30 a month in tips (federal rule).
If your cash wage plus tips comes up short of $7.25 an hour in a workweek, your employer has to make up the difference.
What changes next
No change to the Tennessee minimum wage is scheduled. The rate changes only if Congress changes the federal minimum.
Tip pooling and service charges
No state tip pooling rule; federal rules apply: employers, managers and supervisors may not keep tips, and a mandatory pool may include only customarily tipped workers when a tip credit is taken (back of house may be included only if the full minimum wage is paid).
State law requires an automatic service charge or gratuity that customers assume goes to staff to be paid out to the employees who served, usually by the close of business that day or the next regular payday (banquet and some other events excepted).
Overtime
No state overtime law; the federal rule applies: 1.5 times the regular rate after 40 hours a week. For tipped workers overtime is figured on the full $7.25, so the cash wage for overtime hours is at least $5.76.
Taxes on your tips
Tennessee does not tax wage income, so there is no state income tax on your tips. Federal income tax, Social Security and Medicare still apply. The federal tip deduction can cut the income tax part: see how the No Tax on Tips deduction works.
Check a week's pay
Enter one workweek to see whether your cash wage plus tips reached Tennessee's minimum of $7.25 an hour.
You reached the minimum this week.
You came up short. Your employer owes you at least
If you are underpaid
Start by comparing your pay stubs with your own record of hours and tips. If the numbers don't add up, you can file a complaint with the Tennessee Department of Labor and Workforce Development, Labor Standards Unit: how to file. You can also call the U.S. Department of Labor, Wage and Hour Division, at 1-866-487-9243.
