South Carolina Tip Laws and Requirements
South Carolina adheres to federal Fair Labor Standards Act (FLSA) tip laws, which regulate tipped employees' wages, allow employers to take a tip credit against minimum wage only for hours worked in tipped occupations, mandate a minimum cash wage of $2.13 per hour for tipped workers, permit tip pooling among eligible employees without limits on contributions, and recognize that tips are the property of employees, with the state's tip laws last updated in September 2021 and no deviations from federal standards.
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 South Carolina.
When Were the Tip Laws Last Updated in South Carolina?
Tip laws in South Carolina were last updated in September of 2021.
Does South Carolina Have Tip Laws That Differ from Federal Tip Laws?
No, South Carolina follows federal tip laws.
Who Holds the Ownership of Tips in South Carolina?
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 South Carolina?
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 South Carolina?
Employers are permitted to establish mandatory tip pools, but they must inform employees in advance of the pool. Additionally, employees may not be required to contribute more than what is fair and customary.
Who Can and Can’t Participate in Tip Pools in South Carolina?
Tipped employees may participate. Supervisors, managers, owners, and non-tipped employees may not.
Is there a Difference Between Tips and Service Charges in South Carolina?
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 South Carolina?
Yes, employers may deduct credit card fees from tips.
Do Tips Count Toward the Minimum Wage in South Carolina?
Yes, tips may count toward the minimum wage in South Carolina.
Do Tips Factor Into Regular Rate Calculations for Overtime Pay in South Carolina?
Yes, tips can 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 is allowed to include the tip credit in that calculation.
Are There Cities and Municipalities in South Carolina That Have Their Own Tip and Service Charge Rules That Differ from Statewide Laws?
No, there are no cities or municipalities with differing laws.
What Are the Record-Keeping Requirements for Employers Regarding Tips in South Carolina?
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 South Carolina?
An employee may take legal action against an employer who violates state tip laws.
What are the Penalties for Employers for Not Complying with South Carolina Tip Laws?
Violating South Carolina tip laws can subject an employer to civil penalty of up to $100 per offense and/or criminal penalties. Employees may also be permitted to recover the unpaid wages in damages.
Managing the regulations associated with tips in South Carolina 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.
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Montana Tip Laws and Requirements
Montana's tip laws, updated in 2021, differ from federal FLSA regulations by prohibiting employers from using a tip credit and requiring payment of the full state minimum wage—which is higher than the federal rate—to tipped employees, who retain ownership of their gratuities.
Wyoming Tip Laws and Requirements
Wyoming adheres to federal Fair Labor Standards Act (FLSA) tip laws last updated in 2013, which allow employers to take a tip credit against minimum wage only for hours worked in tipped occupations, require tipped employees to be paid at least $2.13 per hour plus tips, recognize that tips belong to employees and cannot be confiscated by employers, and permit tip pooling among eligible employees without federal limits on contribution amounts.
Missouri Tip Laws and Requirements
Missouri's tip laws, updated in September 2021, differ from federal FLSA regulations by allowing employers to count tips as part of wages but limiting the tip credit to no more than 50% of the state's higher minimum hourly wage, while also adhering to federal rules that require tipped employees to be paid at least $2.13 per hour and permit tip pooling among eligible employees.
Maine Tip Laws and Requirements
Maine's tip laws, updated in June 2023, differ from federal FLSA regulations by limiting employers to count tips as no more than 50% of the state's higher minimum wage, requiring adherence to Maine's wage rates, and recognizing that only tips actually received by employees count toward wage calculations, while also allowing tip pooling without federal limits on contribution amounts.
North Dakota Minimum Wage Laws - WorkforceHub
North Dakota's minimum wage laws, last updated in 2009 to match the federal rate of $7.25 per hour, have no state-specific variations, industry-specific rates, or city-level differences, and any future changes depend solely on federal adjustments or new state legislation.
Kansas Tip Laws and Requirements
Kansas tip laws generally follow federal Fair Labor Standards Act (FLSA) regulations, including the allowance of a tip credit against minimum wage for tipped employees, the requirement to pay tipped workers at least $2.13 per hour, the recognition of dual jobs for tip credit application, the permissibility of tip pooling, and the obligation for employers to inform employees about tip credits and cash wages, with Kansas-specific provisions such as exempting cash gratuities from sales tax and aligning its 2021 updates with federal changes.