Mississippi Tip Laws and Requirements

Under the Fair Labor Standards Act (FLSA), tips are regulated. Employers who meet certain criteria are permitted to take a partial credit against minimum wage obligations for tipped employees. Tipped employees include those engaged in jobs in which they regularly and customarily receive tips.

The tip credit was created by Congress in 1966, and adjustments occurred on December 28, 2021, when the 2021 Dual Jobs Final Rule went into effect. A federal court vacated portions of the final rule in October 2024, which effectively reinstated the original dual jobs regulation (29 C.F.R.531.56(e)). It recognizes that an employee may work in tipped and non-tipped occupations, and employers are only permitted to take the tip credit against minimum wage obligations for hours worked in the tipped occupation.

The FLSA mandates that a tipped worker must be paid at least $2.13 per hour. The FLSA tip credit can be equal to the difference between the direct (or cash) wage paid to the employee and the federal minimum wage. Only tips actually received by an employee count when making the determination of a tipped employee and applying the credit.

The FLSA also permits employees to “pool” or share tips with other eligible employees, although it doesn’t impose a limit on the amount or percentage of the contribution of each employee in a valid tip pool.

State law may differ from the federal FLSA standards. Review what tip laws apply in Mississippi.

When Were the Tip Laws Last Updated in Mississippi?

The tip laws were updated in Mississippi in accordance with federal changes.

Does Mississippi Have Tip Laws That Differ from Federal Tip Laws?

No, Mississippi follows federal law regarding tipped wages. Employers are permitted to take a tip credit as long as each employee is paid at least $2.13 per hour, with the tip credit making up the difference to the federal minimum wage.

Who Holds the Ownership of Tips in Mississippi?

Under federal law, any gratuities paid to employees are their property. Employers are not permitted to require employees to hand in their tips, although they are allowed to count the tip toward the hourly rate.

What are the Rules for Distribution of Credit Card Processing Tips in Mississippi?

Federal law states that all tips paid by credit card must be issued to employees no later than the next regular payday, even if the employer is awaiting reimbursement from the financial provider.

What are the Tip Pooling Rules in Mississippi?

Employers may establish mandatory tip pools, but the tips must be distributed between service employees.

Who Can and Can’t Participate in Tip Pools in Mississippi?

Tipped employees can participate in tip pools. Supervisors, managers, and owners/employers may not.

Is there a Difference Between Tips and Service Charges in Mississippi?

Yes, a mandatory service charge is not considered a tip. Therefore, it would belong to the employer.

To be considered a tip instead of a service charge, a customer must give money voluntarily in an amount of their own choosing. The customer must also be able to determine who receives it, and it can’t be set by employer policy.

Can Employers Deduct Credit Card Fees from Tips in Mississippi?

Yes, Mississippi doesn’t have a law in place that restricts an employer from deducting credit card processing fees from tips.

Do Tips Count Toward the Minimum Wage in Mississippi?

Yes, the tip credit can count toward minimum wage.

Do Tips Factor Into Regular Rate Calculations for Overtime Pay in Mississippi?

No, tips don’t factor into rate calculations for overtime pay. Any eligible employee working over 40 hours in a week should receive overtime pay (1.5 times their normal hourly wage), and the employer can’t include the tip credit in that calculation.

Are There Cities and Municipalities in Mississippi That Have Their Own Tip and Service Charge Rules That Differ from Statewide Laws?

No, there aren’t any cities or municipalities in Mississippi with unique tip or service charge rules. The state adheres to federal law.

What Are the Record-Keeping Requirements for Employers Regarding Tips in Mississippi?

Employers must keep detailed records of all tips reported by employees, including amounts and dates of service. If tip pooling is in effect, the record should also include the arrangements and the distribution of tips to eligible staff members.

What Options Do Employees Have for Remuneration if Their Tips are Withheld in Mississippi?

An employee may take legal action against an employer who violates state tip laws.

What are the Penalties for Employers for Not Complying with Mississippi Tip Laws?

Violating Mississippi tip laws can subject an employer to a fine of up to $1,162 per instance. Employers may also lose licenses, certificates, permits, and other documents that allow them to operate their businesses in the state. Employees may also be permitted to recover the unpaid wages in damages.

Managing the regulations associated with tips in Mississippi can be a challenge. The numerical clock prompt feature allows the employee to input their received tips at the end of the shift, and that information would be available for reporting and payroll processing.