Tipped Minimum Wage in Massachusetts

Minimum Wage Rules for Tipped Workers

Service workers who earn tips can be paid a lower minimum wage. This is sometimes called the tipped minimum wage. Some of the important rules about minimum wage for tipped employees are set forth below.

The minimum wage for tipped workers in Massachusetts is:

$4.95 per hour in 2020
$5.55 per hour in 2021
$6.15 per hour in 2022
$6.75 per hour in 2023

Tip Pooling

Many employers in the restaurant industry require employees to share tips. This is a way to encourage quality service from all staff who interact with customers. It is also a way to even out compensation for service workers who a customer might not think to tip.

It must be done correctly, however. It cannot be used as a way to divert tips for service workers to other kinds of workers in the establishment. The only workers who are allowed to share tips are wait staff, service employees like busboys, and service bartenders. A service bartender is an employee who provides drinks to wait staff to bring to customers. A bartender who serves customers directly is not included in the tip pooling rules under Massachusetts law.

Tipped employees cannot be required to share tips with managers, host or hostess, or kitchen staff. An employer also cannot keep any portion of tips left for service staff for him or herself.

Regulations under federal law regarding tip sharing with back-of-the-house workers have changed over the years. But in Massachusetts, the statute is clear about the limits on who can participate in tip pools.

Wages and Tips Must Equal or Exceed the Regular Minimum Wage

Even though the hourly wage is lower, the employer must still ensure that the combination of wages and tips at least equals the standard minimum wage. This minimum wage rate is $12.75 per hour in 2020, gradually increasing to $15.00 per hour in 2023.

This requires employers to track what tipped workers receive in tips or as part of a tip pool. If any tipped employee does not receive enough in tips to reach the state required minimum, their hourly wage should be adjusted.

An employee who does not reach the regular minimum wage through combination of hourly wages and tips can bring an action for violation of the Massachusetts minimum wage law.

Agreements with Tipped Employees

Even if an employee agrees to a different pay structure than above, that agreement will not relieve the employer of the duty to pay tipped employees lawfully. The tip pooling statute specifically provides that no employer may exempt itself from the law by special contract.

That means that even if you have a signed written agreement to share tips with non-service staff, the tip sharing plan will likely still be unlawful.

All Other Wage and Hour Laws Still Apply

The only difference for tipped workers is the lower minimum wage. All other wage and hour laws still apply to them. This includes the timely payment of wages, payment of earned wages at termination, meal break requirements, and overtime pay requirements.

It also includes the Massachusetts Earned Sick Time Law. Employers in the restaurant industry are not historically used to paying for shifts missed due to sickness. But if the restaurant employs 11 or more people, the law requires employers to pay for any sick time accrued under the law.

How Is the Tipped Minimum Wage Enforced?

The Massachusetts Attorney General has authority to enforce the wage and hour laws, including the laws applicable to tipped workers. An employee who is owed wages under the act can also bring a private lawsuit. The employee must first file a complaint with the Attorney General's office, which will provide a right to sue letter on request.

The Attorney General can decide to investigate a complaint at any time. Most commonly, however, it will leave it to the employee to pursue a remedy in court. Remember that if the employee does bring a private lawsuit and wins, the employer will have to pay not only triple damages but the employee's attorneys fees as well.

Employers should remember that it is unlawful to take action against an employee for complaining about nonpayment of wages, including complaints about tip pooling arrangements. Read more about responding to an employee complaint about wages and pay.

How We Can Help

We can help you navigate these issues and get clarity on your rights and obligations as an employer or an employee. You can use the button below to schedule a call back from a member of our team, give us a call at 781-784-2322, or fill out our web form to let us know a little more about your situation.

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