The new Massachusetts law also includes a new version of the tip credit that employers of tip employees should know about. The definition in the state of Massachusetts of a tipped employee, by the way, is someone who makes more than $20 per month in tips. If you have somebody like that on your pay roll, then you can expect to know what’s what about the tip credit rule in the Massachusetts minimum wage law.
The tip credit rule that I speak of says that you can the employer can pay these tipped workers a reduced minimum wage of $2.63 per hour. To be able to pay your tipped employees this rate, however, you must make sure they know this ahead of time, when they are hired or become tipped employee at your work site. And of course, being that it is a tip credit, the amount of tips that they make per hour, when added to this reduced minimum wage, must add up to equal the total regular minimum wage in the state of $7.50 per hour. That means that an employee must earn at least as much as $4.87 per hour in tips in order to get paid this tip credit minimum wage rate.
Also, according to the Massachusetts minimum wage tipped credit regulations, you cannot withhold any of their tips from them. They must either go all to the employee, or through some sort of tip pooling system through all of your tipped employees. But you cannot keep back their tips from them if, say, the employee brings in more than $4.87 per hour in tips.
Basically, if the information on the Massachusetts Department of Labor Web site is true, that means that the state has one of those tip credits that is fixed at a certain dollar amount, and not some of those other tip credits that we have seen that is a percentage of the regular minimum wage.
