Which statement about minimum wage and tipped employees is true?

Which statement about minimum wage and tipped employees is true?

• A. All employees must receive the standard minimum wage, regardless of tips
• B. Tipped employees receive no wage above tips
• C. Minimum wage applies only to non-tipped workers
• D. Employers may use tips to reach or supplement the minimum wage for tipped employees

Answer: (D)

In tipped-wage rules, employers can count a portion of an employee’s tips toward satisfying the minimum wage. This means the base cash wage can be lower than the standard minimum wage, with the expectation that the employee’s tips will bring the total compensation up to or above the minimum wage. If tips fall short, the employer must make up the difference so the worker’s total earnings meet the threshold. This is why using tips to reach or supplement the minimum wage for tipped employees is permissible and correct. The other statements don’t fit because tipping alone doesn’t replace the minimum wage, and there is a separate minimum for tipped workers rather than a single wage that applies regardless of tips.

In tipped-wage rules, employers can count a portion of an employee’s tips toward satisfying the minimum wage. This means the base cash wage can be lower than the standard minimum wage, with the expectation that the employee’s tips will bring the total compensation up to or above the minimum wage. If tips fall short, the employer must make up the difference so the worker’s total earnings meet the threshold. This is why using tips to reach or supplement the minimum wage for tipped employees is permissible and correct. The other statements don’t fit because tipping alone doesn’t replace the minimum wage, and there is a separate minimum for tipped workers rather than a single wage that applies regardless of tips.