Utah Tip Laws and Requirements
Utah's tip laws, last updated in September 2021, generally align with federal Fair Labor Standards Act (FLSA) regulations that allow employers to take a tip credit against minimum wage for tipped employees earning at least $30 per month in tips, recognize that tips are the property of employees, permit tip pooling among eligible employees without federal limits on contribution amounts, and follow the reinstated original dual jobs rule limiting tip credits to hours worked in tipped occupations.
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 Utah.
When Were the Tip Laws Last Updated in Utah?
Tip laws in Utah were last updated in September of 2021.
Does Utah Have Tip Laws That Differ from Federal Tip Laws?
Utah generally follows federal tip laws for employees earning at least $30 per month in tips. Some exemptions apply.
Who Holds the Ownership of Tips in Utah?
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 Utah?
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 Utah?
Employers are permitted to establish mandatory tip pools, but they must inform employees in writing about the arrangements of the pool when they are hired.
Who Can and Can’t Participate in Tip Pools in Utah?
Tipped employees may participate. Supervisors, managers, owners, and non-tipped employees may not.
Is there a Difference Between Tips and Service Charges in Utah?
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 Utah?
Yes, employers may deduct credit card fees from tips.
Do Tips Count Toward the Minimum Wage in Utah?
Yes, tips may count toward the minimum wage in Utah.
Do Tips Factor Into Regular Rate Calculations for Overtime Pay in Utah?
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 Utah 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 Utah?
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 Utah?
An employee may take legal action against an employer who violates state tip laws.
What are the Penalties for Employers for Not Complying with Utah Tip Laws?
Violating Utah 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 Utah 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.
Related
Connecticut Tip Laws and Requirements
Connecticut's tip laws, updated in September 2020, require employers to comply with the state's higher minimum wage rather than the federal rate, allowing a variable tip credit for tipped employees such as hotel and restaurant waitstaff, while federal regulations under the FLSA set a $2.13 minimum cash wage and permit tip pooling but only allow tip credits for hours worked in tipped occupations, with recent federal rule changes and court decisions affecting these provisions.
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.
Rhode Island Tip Laws and Requirements
Rhode Island's tip laws, updated in June 2022, generally follow federal Fair Labor Standards Act regulations—including the allowance of tip credits and tip pooling—but differ by applying a higher state minimum wage and new tip protections for employees earning over $30 monthly in tips, while federal rules permit employers to take tip credits only for hours worked in tipped occupations and require tipped employees to be paid at least $2.13 per hour.
New Hampshire Tip Laws and Requirements
New Hampshire's tip laws, updated in September 2023, differ from federal FLSA regulations by requiring employers to pay tipped employees a base wage of at least 45% of the minimum wage plus at least $30 per week in tips, while federal law allows employers to take a tip credit against minimum wage obligations only for hours worked in tipped occupations and mandates a minimum cash wage of $2.13 per hour.
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.
North Dakota Tip Laws and Requirements
North Dakota's tip laws, last updated in September 2021, align with federal standards under the Fair Labor Standards Act by allowing employers to take a tip credit against minimum wage obligations for tipped employees—who must be paid at least $2.13 per hour—with the state permitting a tip credit of up to 33% of the minimum wage and recognizing that tips are the property of employees, while also adhering to federal rules on tip pooling and the dual jobs regulation reinstated in 2024.