Virginia tip laws (2026)
Virginia's minimum wage is $12.77 in 2026, and tipped workers can be paid as little as $2.13 an hour in cash, with tips covering up to $10.64. The minimum rises to $13.75 on January 1, 2027 and $15.00 on January 1, 2028. Since July 2026, state law counts tips as wages.
Virginia at a glance
Tip credit allowedVirginia: $12.77 an hour minimum wage. Tipped staff can be paid $2.13 cash, with up to $10.64 counted from tips.
| State minimum wage | $12.77/hr | Statewide from .[1] |
|---|---|---|
| Tipped cash wage | $2.13 | Plus up to $10.64 in tips = $12.77.[1] |
| Max tip credit | $10.64 | Counted from tips.[2] |
| Tip pooling | Allowed | Mandatory pools allowed.[3][4] |
| Card-fee deduction | Pro rata only | Only the tip's share of the fee.[3][4] |
| Card tip payout | Tips the employer owes are wages, due on regular paydays. | Under federal rules, card tips can't wait on the card company.[4][5] |
| Local minimum wages | None | None on file.[6] |
Rates verified against the Virginia Department of Labor and Industry, Payment of Wage Unit on . Rates as of . Tipped totals are worked out from the rates above. Download this data (CSV)
02The yes/no sheet
Can you do this in Virginia?
In Virginia you can take a tip credit of up to $10.64 an hour, can require staff to join a tip pool and can take out only the tip's share of a card fee. Each answer below carries its condition and an official source.
| Number | Can you… | Answer | The condition |
|---|---|---|---|
| 01 | Take a tip credit against minimum wage? | Yes | Pay at least $2.13 cash and count up to $10.64 in tips. Tips must cover the gap.[1][2] |
| 02 | Make staff join a tip pool? | Yes | A 2019 state manual allows qualifying mandatory pools. Parts of that manual are out of date.[3][4] |
| 03 | Include bartenders, bussers, runners and hosts? | Depends | Bartender, busser, food runner and host: depends on actual duties and whether the pool pays everyone a full cash wage.[4][3] |
| 04 | Give managers or supervisors a share? | No | Under federal law, managers and supervisors can't take workers' pooled tips. Tips for service they alone provide are a separate matter.[4] |
| 05 | Let an owner keep any of the tips? | No | Employers can't keep workers' tips. Owners with 20% or more equity who actively manage also count as managers.[4] |
| 06 | Take card processing fees out of tips? | Pro rata | Only the actual proportional card fee on the tip, with required wages paid. Virginia's signed-authorization rule for withholding applies unless a legal exception does.[3][4][5] |
| 07 | Hold card tips until payday? | Deadline | Tips the employer owes are wages, due on regular paydays. Under federal rules, card tips can't wait on the card company.[4][5] |
| 08 | Cover walkouts, breakage or register shortages from tips? | No | Not from tips.[4][5] |
| 09 | Keep a mandatory service charge for the house? | Federal rule | Federal covered employment: compulsory service charges are not tips; distributed amounts are wages included in the overtime regular rate. No separate state distribution rule identified.[4] |
| 10 | Pay tips on a payroll card? | Depends | Allowed. Offer another way to get paid too.[5] |
Not covered here? Ask the Virginia Department of Labor and Industry, Payment of Wage Unit at 804-786-2706 or on doli.virginia.gov/programs/labor-law/payment-of-wage.
03State vs federal
Virginia vs federal law
Virginia sets a stricter rule than federal law on 1 of the 9 rules below, starting with a $12.77 minimum wage against the federal $7.25. Where the two differ, the rule that is better for the worker applies.
| Rule | Federal (FLSA) | Virginia | Comparison |
|---|---|---|---|
| Minimum wageStricter | Federal$7.25[4] | Virginia$12.77[1] | Stricter |
| Tipped cash wageSame as federal | Federal$2.13[4] | Virginia$2.13[1] | Same as federal |
| Max tip creditHigher credit | Federal$5.12[4] | Virginia$10.64[2] | Higher credit |
| Who counts as tippedState rule | FederalMore than $30 a month in tips, customarily and regularly received in the occupation.[4] | VirginiaSomeone who customarily and regularly gets more than $30 a month in tips from people other than the employer.[6] | State rule |
| Managers in the poolFederal applies | FederalManagers/supervisors meeting the executive duties test cannot keep employees’ tips or receive from pools; they may keep only tips received directly for services they directly and solely provide. No salary-level test is used for this tip restriction.[4] | VirginiaUnder federal law, managers and supervisors can't take workers' pooled tips. Tips for service they alone provide are a separate matter.[4] | Federal applies |
| Card fees from tipsSame as federal | FederalOnly the actual proportional credit-card transaction fee may be deducted from charged tips; no deduction exceeding that fee or reducing required minimum wages; state law may forbid even that deduction.[4] | VirginiaTip's share of the fee only[3][4] | Same as federal |
| Card tip payoutState rule | FederalCharged tips due by regular payday, without waiting for processor reimbursement. Employer-administered pools fully distributed by regular payday for the workweek/pay period; if the amount/distribution cannot be determined before payroll, distribute as soon as practicable afterward.[4] | VirginiaTips the employer owes are wages, due on regular paydays. Under federal rules, card tips can't wait on the card company.[4][5] | State rule |
| Mandatory service chargesFederal applies | FederalA compulsory service charge is not an FLSA tip. Amounts distributed to employees are wages that may satisfy wage obligations and must enter the regular rate for overtime. This federal wage classification does not decide contractual or state-law ownership.[4] | VirginiaFederal covered employment: compulsory service charges are not tips; distributed amounts are wages included in the overtime regular rate. No separate state distribution rule identified.[4] | Federal applies |
| Overtime for tipped staffState rule | FederalFor covered nonexempt employees, overtime generally begins after 40 hours in a workweek. Use the full regular rate, at least the full federal minimum wage, not $2.13; the hourly tip credit is not increased for overtime. Voluntary tips above the tip credit are excluded; distributed service charges enter the regular rate.[4] | VirginiaVirginia follows federal overtime rules: 1.5 times the full regular rate after 40 hours a week, less the same tip credit.[7][4] | State rule |
Every state starts from the same federal floor. Federal tip law baseline: the FLSA rules, rates and sources, and how Virginia fits among the four tip credit classes.
Not covered here? Ask the Virginia Department of Labor and Industry, Payment of Wage Unit at 804-786-2706 or on doli.virginia.gov/programs/labor-law/payment-of-wage.
04Wages
Minimum wage and the tip credit in Virginia
In Virginia employers can pay tipped staff $2.13 an hour and count up to $10.64 in tips toward the $12.77 minimum. If tips fall short, the employer makes up the difference.[1]
One server, one slow 30-hour week in Virginia
A busy week with $319.20 or more in tips needs no top-up. Every tip above that is the server's. Fictional worker and tips.
Other rates
| Rate | Hourly |
|---|---|
| Youth or training Approved training program, first 90 daysOnly for an employer training program that meets state rules. Not a general youth discount. Rate set by formula: the greater of the federal minimum or 75% of the Virginia minimum.[8][9] | $9.58* |
* Worked out by Ferry from the formula, using the $12.77 state minimum wage. Not an official figure.
Not covered here? Ask the Virginia Department of Labor and Industry, Payment of Wage Unit at 804-786-2706 or on doli.virginia.gov/programs/labor-law/payment-of-wage.
05Local rates
City and county minimum wages in Virginia
No city or county minimum wages above the $12.77 state rate are on file for Virginia.[6]
06Tip pool
Who can be in the tip pool in Virginia
Virginia allows tip pools, and employers can make them mandatory. Owners, managers and supervisors can't share in them. A tip pool collects tips and splits them among staff; a tip-out is one worker handing part of their tips to others.
| Role | Can share? | Condition |
|---|---|---|
| Front of house | ||
| Server | Depends | Depends on actual duties and whether the pool pays everyone a full cash wage.[4] |
| Bartender | Depends | Depends on actual duties and whether the pool pays everyone a full cash wage.[4] |
| Busser | Depends | Depends on actual duties and whether the pool pays everyone a full cash wage.[4] |
| Food runner | Depends | Depends on actual duties and whether the pool pays everyone a full cash wage.[4] |
| Host | Depends | Depends on actual duties and whether the pool pays everyone a full cash wage.[4] |
| Barback | Depends | Depends on actual duties and whether the pool pays everyone a full cash wage.[4] |
| Expo | Depends | Depends on actual duties and whether the pool pays everyone a full cash wage.[4] |
| Leadership | ||
| Shift lead | Depends | Depends on actual duties and whether the pool pays everyone a full cash wage.[4] |
| Manager or supervisor | Not allowed | Can't receive workers' pooled tips under federal law.[4] |
| Owner | Not allowed | Can't receive workers' pooled tips under federal law.[4] |
- Managers and supervisors
- Under federal law, managers and supervisors can't take workers' pooled tips. Tips for service they alone provide are a separate matter.[4]
- Owners
- Employers can't keep workers' tips. Owners with 20% or more equity who actively manage also count as managers.[4]
Not covered here? Ask the Virginia Department of Labor and Industry, Payment of Wage Unit at 804-786-2706 or on doli.virginia.gov/programs/labor-law/payment-of-wage.
07Put it to work
Setting up a tip pool in Virginia
Under Virginia rules, 6 of the 10 staff in this example can share a $1,200 pool. The table splits the same pool by percentage, by points and by hours.
| Who | By % | By points | By hours |
|---|---|---|---|
| Maya | $268.29 | $250.00 | $211.78 |
| Jordan | $268.29 | $250.00 | $211.76 |
| Priya | $268.29 | $250.00 | $211.76 |
| Sam | $175.61 | $200.00 | $211.76 |
| Luis | $109.76 | $125.00 | $176.47 |
| Ava | $109.76 | $125.00 | $176.47 |
| Theo | Not in the pool. Depends on the facts, left out of this example. | ||
| Kim | Not in the pool. Depends on the facts, left out of this example. | ||
| Rafa | Not in the pool. Depends on the facts, left out of this example. | ||
| Dana | Not in the pool. Can't receive workers' pooled tips under federal law. | ||
| Total | $1,200.00 | $1,200.00 | $1,200.00 |
Fictional restaurant and staff. The guest-facing staff here are assumed to meet Virginia's condition for sharing (see who can be in the tip pool, above). Percentages and point weights are examples, not a recommendation. Shares are rounded to the cent, and any leftover cent goes to the first server. Run your own numbers in the tip pooling calculator.
Ferry Tip Manager: support pool split by hours
Servers and bartenders pay into the support pool, and Tip Manager splits it by hours worked. Each person sees their share, with no spreadsheet at close.
Who it's for Full-service restaurants that tip out bussers, runners and bar backs
08Service charges
Service charges vs tips in Virginia
Virginia has no service charge rule of its own. Under federal law a mandatory service charge is not a tip, and any part paid to staff counts as wages.
| Question | OptionalTip | MandatoryService charge |
|---|---|---|
| Who sets the amount | The guest | The business |
| Who it belongs to | The worker it was left for, or the pool | Federal covered employment: compulsory service charges are not tips; distributed amounts are wages included in the overtime regular rate. No separate state distribution rule identified.[4] |
| Can it go to staff? | Yes, through the pool | Yes. Amounts paid to staff are wages, not tips.[4] |
| How it's taxed (federal) | Tip income the worker reports | Regular wages, with payroll taxes[10][11] |
| Guest notice | None needed | No state rule. Federal law sets no menu or receipt notice rule.[6] |
- Step 1Did the guest choose whether to pay it, and how much?YesIt's a tip. It belongs to staff.NoIt's a mandatory charge. Go to step 2.
- Step 2What does Virginia say?Federal ruleFederal covered employment: compulsory service charges are not tips; distributed amounts are wages included in the overtime regular rate. No separate state distribution rule identified.[4]
- Step 3Check the cityNo city service charge rules on file for Virginia.
- Menu and receipt notice
- No state rule. Federal law sets no menu or receipt notice rule.[6]
- Large-party auto gratuities
- Federal compulsory automatic charges are service charges, not tips; no separate state distribution rule identified.[4]
Local service charge rules
No local service charge rules on file for Virginia.
More on the difference: service charge vs tip.
09Card tips
Card tips in Virginia: fees and payout timing
In Virginia only the tip's share of the card processing fee can come out of a card tip. Payout deadline: tips the employer owes are wages, due on regular paydays. Under federal rules, card tips can't wait on the card company.
Only the actual proportional card fee on the tip, with required wages paid. Virginia's signed-authorization rule for withholding applies unless a legal exception does.[3][4][5]
When card tips have to land
- TonightGuest adds a tip On the card, at the table.
- CloseShift is tallied The pool is split by your rules.
- DeadlineVirginia rule Tips the employer owes are wages, due on regular paydays. Under federal rules, card tips can't wait on the card company.[4][5]
- Last dayFinal pay Quit or fired: all earned wages by the normal payday for that work, as if the job had continued.[5]
Paydays: Hourly: at least every two weeks or twice a month. Salaried: at least monthly. Some student and high-earner agreements are exceptions.[5]
Paying tips on a payroll card
- Allowed?Depends
- Worker consent needed?DependsConsent is normally required. Workers hired after January 1, 2010 can default to a card if offered a bank option and free access.[5]
- Free way to get the money?State ruleA default card needs full written fee disclosure and at least one free withdrawal or transfer per pay period, for any amount.[5]
- Must you offer another option?Yes
- Holding cash tipsFederal ruleNo state rule. Federal rule applies: employer may collect to administer a valid pool, then distribute under the regular-payday rule. No broader authorization to retain cash tips is established.[4][6]
- Tips shown on the pay stubNo (federal)No state rule. Federal rule applies: no. FLSA does not require pay stubs; state laws and employer records are separate.[13][6]
Ferry Pay: each tip share, paid out digitally
Each person's direct tips, tip outs and payable amount in one view, then paid through Ferry Pay. No cash to keep on hand for payouts. Eligibility and fees apply.
Who it's for Operators who want to stop the nightly cash run
“Since launching this card program, we've reduced our cash-carrying costs by over 66 percent”
10Records
Records and notices in Virginia
Keep each tipped worker's tips and hours on record, shift by shift. Virginia: state pay statements: at least three years.
Virginia State
- Tip records Each payday, show the employer, hours if relevant, rate, gross pay, each deduction and the net math. Federal tip records apply separately.[5][4]
- How long to keep them State pay statements: at least three years. Federal payroll records: three years, with supporting calculations kept two years.[5][14]
- Tip credit notice Required. Before taking the credit, tell workers the cash wage, the credit amount, that credit can't exceed tips, and the pool rules.[4]
- Posters and forms Paystub or online earnings accounting each payday; Federal FLSA poster where covered; State minimum-wage notice voluntary.[5][14][1]
Everywhere Federal
- Tip records Maintain employee identity, time and pay records. Tip-credit employers additionally retain tipped employee, reported tips, credit amounts and hours/earnings by tipped and nontipped occupation. No-tip-credit employers operating mandatory pools record each recipient and weekly/monthly tips. IRS daily records/reporting are separate obligations.[4]
- How long to keep them FLSA: payroll records at least three years; underlying wage-computation records two years. Tax retention is separate.[14]
- Tip credit notice Oral or written notice must state cash wage; tip credit amount; credit cannot exceed actual tips; employee retains tips except valid traditional pool; credit unavailable until informed. Traditional pool contribution amounts also disclosed.[4]
- A written pool policy Good practice, not a federal rule: who's in, how it splits, when it pays. Share it with staff. How to write one.
Think your tips were handled wrong in Virginia?
Workers in Virginia can file a tip or wage claim with the Virginia Department of Labor and Industry, Payment of Wage Unit (804-786-2706). Filing is free, and this page can't settle a dispute; the state can.[1]
Retaliation: Firing or punishing workers over wage complaints or testimony is barred. With consent, the state can seek reinstatement, lost wages and an equal amount.[15]
Penalties: Unpaid wages plus an equal amount, 8% interest and fees. Knowing violations: triple wages. Since July 2026, a 14-day fix can be a good-faith defense.[5]
Can they take this out of my tips?
- Walkouts and dine-and-dashNot allowedFederally covered employers can't use tips to cover business costs. Regular wage deductions follow separate rules.[4]
- BreakageNot allowedFederally covered employers can't use tips to cover business costs. Regular wage deductions follow separate rules.[4]
- Register shortagesNot allowedFederally covered employers can't use tips to cover business costs. Regular wage deductions follow separate rules.[4]
- UniformsNot allowedFederally covered employers can't use tips to cover business costs. Regular wage deductions follow separate rules.[4]
- Card processing feesDependsOnly the actual card fee on the tip, with required wages paid. Follow the state signed-authorization rule unless a legal exception applies.[4][5]
- A manager's shareNot allowedEmployers can't keep workers' tips under federal law.[4]
11Law changes
What changed in Virginia tip law, and what's coming
Next scheduled change: the Virginia minimum wage goes to $13.75 on . Most recent change: Chapter 1040 counts tips as wages, expands enforcement and adds a good-faith defense with a 14-day cure ().
Bills and ballot measures
Nothing pending as of .
Key statutes
- Code 40.1-28.8 through 28.12
- Code 40.1-29, 29.2, 33.2
- 2019 DOLI minimum-wage manual D3–6, historical policy
July 2026
Tips now count as wages under Virginia law
Chapter 1040 took effect July 1, 2026. It puts tips inside the wage-payment law and adds bigger remedies, with a new cure window for employers.[5][7]
- 01
Tips are wages
Earned tips are expressly included in wages, so regular payday and pay-statement rules cover them.[5]
- 02
Remedies
Unpaid wages plus an equal amount, 8% interest and fees. Knowing failures can mean triple wages.[5]
- 03
14-day cure
An employer acting in good faith that fixes the problem within 14 days may avoid the added damages and penalties.[5]
- 04
State overtime
Virginia's overtime law follows federal rules, with state enforcement starting July 1, 2026.[7]
12FAQ
Virginia tip law questions
Plain answers to the 8 questions restaurant owners and staff ask most about Virginia tip law, each linked to its source.
What is Virginia's tipped minimum wage in 2026?
How much will Virginia's minimum wage be in 2027 and 2028?
Who counts as a tipped employee in Virginia?
Someone who customarily and regularly gets more than $30 a month in tips from people other than the employer.[6]
Can a manager take money from the tip pool?
No. Federal law bars managers and supervisors from taking workers' pooled tips, whether or not the employer takes a tip credit.[4]
Can card processing fees come out of tips?
When is a final paycheck due?
On the normal payday for that work, whether the worker quits or is fired.[5]
What changed for Virginia tips in July 2026?
State law now counts tips as wages and enforcement got wider. Employers also got a good-faith defense if they fix a problem within 14 days.[5]
13Compare
How Virginia compares with nearby states
Virginia borders Kentucky, Maryland, North Carolina, Tennessee, West Virginia and District of Columbia. Maryland and District of Columbia pay a higher minimum wage than Virginia's $12.77. Running locations on both sides of a line? Each one follows its own state's rules.
Neighboring states
- Kentucky tip laws$7.25 min wage $2.13 tipped cash wage $2.13 cash
- Maryland tip laws$15.00 min wage $3.63 tipped cash wage Above $2.13
- North Carolina tip laws$7.25 min wage $2.13 tipped cash wage $2.13 cash
- Tennessee tip laws$7.25 min wage Federal $2.13 cash wage Federal
- West Virginia tip laws$8.75 min wage $2.62 tipped cash wage Above $2.13
- District of Columbia tip laws$18.40 min wage $10.30 tipped cash wage Above $2.13
States with the same rules
Same tip credit class as Virginia: Tip credit, federal cash wage.
- Indiana tip laws$7.25 min wage $2.13 tipped cash wage Also a $2.13 tipped cash wage, and only the tip's share of card fees
- Kansas tip laws$7.25 min wage $2.13 tipped cash wage Also a $2.13 tipped cash wage, and only the tip's share of card fees
- Nebraska tip laws$15.00 min wage $2.13 tipped cash wage Also a $2.13 tipped cash wage, and only the tip's share of card fees
- Oklahoma tip laws$7.25 min wage $2.13 tipped cash wage Also a $2.13 tipped cash wage, and only the tip's share of card fees
- Utah tip laws$7.25 min wage $2.13 tipped cash wage Also a $2.13 tipped cash wage, and only the tip's share of card fees
- Texas tip laws$7.25 min wage $2.13 tipped cash wage Also a $2.13 tipped cash wage
The law decides who's in. Ferry runs the split.
See how operators set pool rules in Ferry Tip Manager and pay tips out without a cash run. Bring your own Virginia setup.
14Sources
Sources for Virginia tip laws
Every figure on this page links to one of these 15 sources: 12 for Virginia and 3 for the federal baseline. They are statutes, regulations and government agency pages, each with the date it was checked.
- 1Payment of Wage current minimum-wage FAQVirginia Department of Labor and Industry · Official source · Checked Pinpoint: Minimum wage FAQ; Tipped employees FAQwww.doli.virginia.gov/programs/labor-law/payment-of-wage
What the source says
“For the period of January 1, 2026, until January 1, 2027, the established adjusted state hourly minimum wage is $12.77 per hour.”
“allows an employer to pay a tipped employee at least $2.13 per hour.”
“If a tipped employee fails to earn enough tips to reach the Virginia minimum wage rate, the employer must pay them the remaining difference.”
- 2State Tipped Minimum Wage TableU.S. Department of Labor · Official source · Page updated · Checked Pinpoint: Virginia row July 2026www.dol.gov/agencies/whd/state/minimum-wage/tipped
What the source says
“Virginia $12.77 $10.64 $2.13 More than $30”
- 3Minimum Wage Field Operations ManualVirginia Department of Labor and Industry · Official source · Page updated · Checked Pinpoint: D3, p. 10; D5, p. 11townhall.virginia.gov/l/GetFile.cfm?File=C%3A%5CTownHall%5Cdocroot%5CGuidanceDocs%5C181%5CGDoc_DOLI_1759_v6.pdf
What the source says
“tipped employees spend a substantial amount of time (in excess of 20 percent) performing general preparation work or maintenance, no tip credit may be taken for the time spent in such duties.”
“it is not necessary that the pooling be voluntarily consented to by the employees involved.”
“following employee occupations would therefore not be eligible to participate: janitors, dishwashers, chefs or cooks, laundry room attendants.”
- 4Fact Sheet 15 Federal Tipped EmployeesU.S. Department of Labor · Official source · Checked Pinpoint: Overtime; Tip pooling; Tip Credit, paragraph 2www.dol.gov/agencies/whd/fact-sheets/15-tipped-employees-flsa
What the source says
“The employer may not take a larger FLSA 3(m)(2)(A) tip credit for an overtime hour than for a straight time hour.”
“The FLSA allows employers to require employees to share or “pool” tips with other eligible employees.”
“An employer that takes a tip credit can require tipped employees to contribute tips only to a tip pool which is limited to employees in occupations in which they customarily and regularly receive tips,”
- 5Code 40.1-29 Wage payment and remediesVirginia General Assembly · Official source · Page updated 2026 · Checked Pinpoint: 29(B); 29(C), consent/default exceptionslaw.lis.virginia.gov/vacode/title40.1/chapter3/section40.1-29
What the source says
“pay salaried employees at least once each month and employees paid on an hourly rate at least once every two weeks or twice in each month”
“such payment shall be made on or before the date on which he would have been paid for such work had his employment not been terminated.”
“even though such employee has not affirmatively consented thereto, if the employee fails to designate an account at a financial institution”
- 6Code 40.1-28.9 Definitions and tipped wageVirginia General Assembly · Official source · Page updated 2026 · Checked Pinpoint: 28.9(A), effective through 2026law.lis.virginia.gov/vacode/title40.1/chapter3/section40.1-28.9
What the source says
“customarily and regularly receives tips totaling more than $30 each month”
“An employer shall not classify an individual as a tipped employee if the individual is prohibited by applicable federal or state law or regulation from soliciting tips.”
- 7Code 40.1-29.2 Overtime employer liabilityVirginia General Assembly · Official source · Page updated 2026 · Checked Pinpoint: 29.2law.lis.virginia.gov/vacode/title40.1/chapter3/section40.1-29.2
What the source says
“all applicable exemptions, overtime calculation methods, methods of overtime payment, or other overtime provisions within the federal Fair Labor Standards Act and any attendant regulations, guidance, or rules shall apply.”
- 8Code 40.1-28.10 Minimum wagesVirginia General Assembly · Official source · Page updated 2026 · Checked Pinpoint: 28.10(A)(2)law.lis.virginia.gov/vacode/title40.1/chapter3/section40.1-28.10
What the source says
“a rate not less than the federal minimum wage or 75 percent of the Virginia minimum wage provided for in this section, whichever is greater.”
- 9Regulation Governing Job Training ProgramsVirginia General Assembly · Official source · Page updated · Checked law.lis.virginia.gov/admincodefull/title16/agency15/chapter60
What the source says
“The training wage shall not be applied to: a. Seasonal employees; or b. Temporary employees;”
- 10Tip recordkeeping and reportingInternal Revenue Service · Official source · Checked Pinpoint: Service charges are not tips, paragraph 2; qualified tips deduction, net-income limit; tip income, Social Security/Medicarewww.irs.gov/businesses/small-businesses-self-employed/tip-recordkeeping-and-reporting
What the source says
“Service charges (also referred to as “auto-gratuities”), when distributed to an employee, are generally treated as wages paid by the employer to the employee rather than tips paid by the customer.”
“For self-employed individuals, the deduction may not exceed the individual’s net income (without regard to this deduction) from the trade or business in which the tips were earned.”
“These amounts are subject to federal income tax and generally are also subject to Social Security and Medicare taxes.”
- 11Revenue Ruling 2012-18Internal Revenue Service · Official source · Page updated 2012 · Checked Pinpoint: Q 1/A 1, four distinguishing factors; p. 1, ruling headingwww.irs.gov/pub/irs-drop/rr-12-18.pdf
What the source says
“compulsion; (2) the customer must have the unrestricted right to determine the amount; (3) the payment should not be the subject of negotiation or dictated by employer policy; and (4) generally, the customer has the right to determine who receives the payment.”
“Rev. Rul. 2012-18”
- 12Payroll Card Choice and DisclosuresConsumer Financial Protection Bureau · Official source · Page updated · Checked Pinpoint: Federal employee choicewww.consumerfinance.gov/ask-cfpb/if-my-employer-offers-me-a-payroll-card-do-i-have-to-accept-it-en-407
What the source says
“Your employer has to offer you at least one alternative and allow you to choose.”
- 13Questions and Answers About the FLSA, DOL WHDU.S. Department of Labor · Official source · Checked Pinpoint: Recordkeeping and Notices, Are pay stubs required?www.dol.gov/agencies/whd/flsa/faq
What the source says
“However, the FLSA does not require an employer to provide employees pay stubs.”
- 14Fact Sheet 21 Federal RecordsU.S. Department of Labor · Official source · Checked Pinpoint: Federal Posting; Posting, paragraph 1www.dol.gov/agencies/whd/fact-sheets/21-flsa-recordkeeping
What the source says
“Employers must display an official poster outlining the provisions of the Act”
“Records on which wage computations are based should be retained for two years”
“Each employer shall preserve for at least three years payroll records, collective bargaining agreements, sales and purchase records.”
- 15Code 40.1-33.2 Wage-claim retaliationVirginia General Assembly · Official source · Page updated 2020 · Checked Pinpoint: 33.2(A)law.lis.virginia.gov/vacode/title40.1/chapter3/section40.1-33.2
What the source says
“An employer shall not discharge or in any other manner discriminate against an employee because such employee has filed any complaint”
15Methodology
How we research these pages
Every figure on this page comes from an official source, a statute, a regulation or a government agency page, and links to it where it is used. Ferry checks the page against those sources on a schedule and logs every change.
- 1
Official sources only
Statutes, regulations, state labor agencies, city ordinances and the U.S. Department of Labor. No vendor blogs, no AI answers, no secondary summaries as the only source.
- 2
Every figure is linked
Each rate and rule carries a numbered link to the statute or agency page behind it, with the exact pinpoint and, where available, a link that opens at the sentence itself.
- 3
Re-checked on a schedule
Every page is re-checked each January and July, and whenever a state or city changes a rate. Cash wage plus tip credit is checked against the minimum wage on every build.
- 4
Gaps are left out, not guessed
If a rule can't be confirmed from an official source, it isn't shown. The page points to the state agency instead.
What changed on this page
- First version of this page. Every figure was checked against the official sources listed on this page.
Researched by Ferry's tip operations research team. Last reviewed .
Changes to the law itself are listed in What changed and what's coming.
16Every state
Tip laws in every state
Pick any state for its tip credit, tip pool, service charge and card tip rules. Each chip shows the state's tip credit class.
- No tip creditNo tip credit
- Above $2.13Tip credit, cash wage above federal
- $2.13 cashTip credit, federal cash wage
- FederalFederal rates apply
51 of 51 state pages. Open the master guide for the federal baseline, tip credit classes and the full comparison table.