Florida Tip Laws: Everything Employers Should Know

By 7shifts Staff Dec 14, 2023

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Florida tip laws, just like the broader set of Florida restaurant labor laws, can be tricky to navigate. Restaurant owners and managers must keep up with a steadily rising minimum wage (including tipped minimum wage), overtime laws, and other state-specific labor laws.

Restaurateurs opening up shop in Florida may have questions about tips. How do you handle payment if an employee has both tipped and non-tipped responsibilities? What about overtime pay for tipped employees? What are the consequences of getting it wrong?

The stakes are high: Employers who don’t follow these guidelines put themselves at risk. One small restaurant group paid over $250,000 in back wages, and a single sushi restaurant in Fort Myers faced a $262,000 bill for forcing wait staff to share tips with managers.

What counts as a tip?

In Florida, when a customer pays in cash, a tip is any cash a customer leaves on top of the bill.

Amounts indicated as a tip in a credit card transaction are also considered tips, though employers may deduct processing fees from the tip amount.

Mandatory service charges (like the automatic gratuity some restaurants require for large parties) are not considered tips. Employees have no legal right to this money, and if the employer chooses to give some of the service charge money to the employees, that money must be treated as wages—meaning the employer needs to withhold payroll taxes.

However, this can be a little misleading for diners, who aren’t always aware of this and may not leave an additional tip on top of a mandatory service charge as a result.

Who qualifies as a tipped employee?

The Fair Labor Standards Act (FLSA) defines (in Fact Sheet #15) tipped employees as those “engaged in an occupation in which they customarily and regularly receive more than $30 a month in tips.”

Florida doesn’t have laws that say otherwise, so the FLSA guidance applies.

In the restaurant industry, tipped employees typically work in these roles:

  • Waiter or server
  • Counter personnel
  • Bussers
  • Bartenders

Can employers keep tips in Florida?

No, employers cannot keep tips in Florida. However, employers can and do take a tip credit out of their tipped employees’ wages.

Tips credits and minimum wage in Florida

Fully understanding tip credits and non-tipped minimum wage requires knowledge about the standard Florida minimum wage and tip credit practices.

A tip credit allows employers to subtract from the state’s minimum wage, with tip income making up the difference (and often exceeding the state minimum wage).

Florida’s standard minimum wage is in transition. Through September 2024, the rate is $12 per hour and will increase by $1 each year until it reaches $15 per hour in September 2026.

What is the tip credit amount in Florida?

The tip credit in Florida is $3.02 per hour worked. For an employer to claim a tip credit, they must be able to show that tipped employees make at least the full minimum wage between their direct wages and tip credit amount. If the employee’s tips plus hourly wages don’t meet the minimum wage, it’s the employer’s responsibility to make up the difference.

What is the tipped minimum wage in Florida?

Because the tip credit in Florida is $3.02, you’d subtract that from the state’s $12 per hour minimum wage to determine the tipped minimum wage: $8.98 per hour (through September 2024). This will increase by $1 per hour each year until it reaches $11.98 in September 2026.

This figure is higher than the federal minimum wage for tipped employees, defined by the FLSA as just $2.13 per hour.

What is the 80/20 rule for tipped employees in Florida?

The 80/20 rule applies to tipped employees who spend some amount of their work time doing “tip-supporting work” rather than work that produces tips directly.

The rule has had a turbulent few years, getting nixed during the Trump administration and then getting reinstated and clarified during the Biden administration.

This rule states that as long as an employee spends 80% of a shift on tipped work, the employer can take the tip credit for the entire shift. The 2021 updates added two important clarifications:

  • The non-tipped work must be related to tipped work, or be tip-supporting.
  • The employee cannot be required to perform non-tipped work for more than 30 consecutive minutes.

The 80/20 rule is closely connected to the regulations surrounding dual jobs, which we’ll cover in more detail later.

Tip pooling (or “tipping out”) in Florida

Restaurant tip pooling laws are based on federal law (the FLSA, including recent updates and rulings). States can modify or add to these general regulations, but Florida hasn’t done this, so the federal rules apply.

Employers may require tip pooling in Florida, where tipped employees contribute a defined percentage of their tips to a pool that their employer redistributes among all tipped employees. This model ensures equity for tipped employees like food runners who don’t pull in the same level of tips as servers.

There are no defined limits on tip pooling, but employees must retain at least enough of their tips to meet the full state minimum wage each workweek.

Employers cannot include non-tipped personnel to establish a valid tip pool. Law firm Feldman Legal Group explains:

“Your employer cannot make you share tips with workers who wouldn’t ordinarily receive tips, such as a cook or dishwasher. A restaurant shared tip pool would normally include wait staff, table bussers, counter workers, and bartenders.”

What if an employee has dual jobs?

When some of an employee’s work (waiting tables) is tipped while other work (cleaning, restocking, etc.) is not, it’s considered a dual job.

Under federal law, if someone performs related non-tipped duties at the same time as their tipped duties (or in “a reasonable time” before or after tipped duties), the employer can take a tip credit for the time spent on those non-tipped duties. That means the employer may pay the employee the tipped minimum wage for that time, not just for time spent working on tipped duties.

However, in a 2021 final ruling, the Department of Labor clarified (see point 3) that these non-tipped duties must not be performed for “a substantial amount of time” (exceeding either 20% of hours worked or “a continuous period of 30 minutes”).

In these situations, the employer must still ensure that the employee’s wages and tips add up to at least the full minimum wage.

For example, say a server spends most of their shift waiting tables (a tipped duty) but spends a few minutes here and there cleaning and doing basic food preparation (non-tipped duties) when business is slow. The employer may claim the tip credit and pay the employee tipped minimum wage for the entire shift as long as total earnings (wages + tips) equal or exceed the state minimum wage.

However, if a tipped employee is assigned unrelated responsibilities, spends more than 20% of a workday or work week on non-tipped duties, or works on non-tipped duties for longer than 30 minutes straight, the tip credit doesn’t apply and the employer must pay at least full minimum wage.

For example:

  • A bartender might be asked to run personal errands for the restaurant owner during a shift.
  • A restaurant with a staffing shortage might call in a tipped employee for a full BOH shift.
  • A server might spend a solid hour cleaning and prepping between the lunch and dinner rushes.

Employers cannot take tip credits for any of these non-tipped duties, and the employee must receive at least state minimum wage.

Overtime pay for tipped employees

Federal regulations for overtime pay apply in Florida since there are no separate state laws about overtime. Employees who work over 40 hours per week must be paid at time-and-a-half (1.5 times the standard hourly wage).

This rule is the same for tipped employees and salaried employees. However, the way businesses calculate overtime pay is more complicated for tipped workers.

To calculate the overtime pay rate for tipped workers, use this formula:

Full minimum wage rate x 1.5 – tip credit

Through September 2024, that looks like $12 x 1.5 – $3.02 = $14.98/hr

Additional resources

For more information on Florida tip laws and restaurant labor laws, consider these additional helpful resources:

7shifts Staff, 7shifts Author

7shifts Staff

7shifts Author

7shifts team of writers and experts in the hospitality industry.