Washington Tip Laws and Requirements
Washington state tip laws, updated in April 2023, differ from federal FLSA regulations by prohibiting employers from taking a tip credit toward minimum wage, mandating that all tips are the sole property of employees, and disallowing employers from retaining any gratuities, while federal law permits tip credits and tip pooling under specific conditions.
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 Washington.
When Were the Tip Laws Last Updated in Washington?
Tip laws in Washington were updated in April 2023.
Does Washington Have Tip Laws That Differ from Federal Tip Laws?
Yes, Washington has laws in place that differ from the regulations under the FLSA. It is not permitted to take a tip credit on any tipped employee to reach the hourly minimum wage.
Who Holds the Ownership of Tips in Washington?
Under state law, any gratuities paid to employees are their property. Employers are not permitted to keep tips.
What are the Rules for Distribution of Credit Card Processing Tips in Washington?
A tip given to an employee via credit card may be given when it is earned or at the end of the pay period during which the tips were earned.
What are the Tip Pooling Rules in Washington?
Employers in Washington are allowed to establish tip pools. Eligible employees share a portion of their tips, which are distributed among the group. However, any tips distributed from the pool must be in addition to the employee’s hourly minimum wage.
Who Can and Can’t Participate in Tip Pools in Washington?
Tipped employees are allowed to participate in tip pools. Salaried supervisors, managers, and business owners can’t participate.
Is there a Difference Between Tips and Service Charges in Washington?
Yes, a mandatory service charge is not considered a tip. Therefore, it would belong to the employer. It is required for the employer to disclose who will receive the service charge.
To be considered a tip instead of a service charge, a customer must give money (free from compulsion) 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 Washington?
Yes, employers are permitted to deduct a prorated amount of credit card fees from tips paid to employees. They are not allowed to deduct more than the prorated amount or any business expenses, including cash register shortages.
Do Tips Count Toward the Minimum Wage in Washington?
No, employers may not use tips to count toward the minimum hourly wage in Washington. Tip credits are not allowed by law.
Do Tips Factor Into Regular Rate Calculations for Overtime Pay in Washington?
Any eligible employee working over 40 hours in a week should receive overtime pay (1.5 times their normal hourly wage). Tips do not factor in, as tip credits are not permitted in Washington.
Are There Cities and Municipalities in Washington That Have Their Own Tip and Service Charge Rules That Differ from Statewide Laws?
The key difference between specific cities and municipalities in Washington is the hourly wage. Any employee working in a city with a higher wage than the state rate must earn at least that much per hour.
What Are the Record-Keeping Requirements for Employers Regarding Tips in Washington?
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 Washington?
An employee may take legal action against an employer who violates Washington tip laws.
What are the Penalties for Employers for Not Complying with Washington Tip Laws?
Violating Washington tip laws can subject an employer to a fine of up to $1,000 per violation, along with the risk of litigation.
Related
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.
Virginia Tip Laws and Requirements
Virginia's tip laws, last updated in September 2021, generally align with federal Fair Labor Standards Act (FLSA) regulations—allowing employers to take a tip credit against minimum wage for tipped employees who earn at least $2.13 per hour, permitting tip pooling among eligible employees, and recognizing that tip credits apply only to hours worked in tipped occupations—while also adhering to Virginia's higher statewide minimum wage, with ownership of tips governed by federal standards.
Pennsylvania Tip Laws and Requirements
Pennsylvania's tip laws, updated in August 2022, align with federal Fair Labor Standards Act regulations by allowing employers to take a tip credit against minimum wage for tipped employees who earn at least $135 per month in tips, requiring a base hourly wage of at least $2.83, while recognizing that tips are the property of employees and that tip pooling is permitted without federal limits on contribution amounts.
Washington, DC Tip Laws and Requirements
Washington, DC's tip laws, updated most recently by the 2022 Initiative 82, differ from federal FLSA regulations by phasing out the tipped minimum wage over 4.5 years, starting with a $10 base wage for tipped workers as of July 1, 2024, while federal law permits employers to take a tip credit against minimum wage only for hours worked in tipped occupations and mandates a minimum cash wage of $2.13 per hour plus actual tips received.
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.