What is the federal minimum wage for tipped employees, so long as their tips meet the minimum hourly wage?

The federal minimum wage for tipped employees is set at $2.13 per hour, provided that their tips combined with this base wage meet or exceed the federal minimum wage for non-tipped employees, which is currently $7.25 per hour. This system allows employers to pay a lower base rate, assuming that the employees will earn enough in tips to reach at least the minimum wage.

This two-tiered system is established under the Fair Labor Standards Act (FLSA), which recognizes that tipped employees typically earn a substantial amount of their income from tips. If an employee's total earnings, including tips, do not meet the standard minimum wage, the employer is required to compensate the difference.

Understanding this structure is crucial for payroll compliance and determining minimum wage obligations for tipped employees in various service-oriented industries, such as restaurants and bars. The rates provided in the other options do not align with the federal standard set by the FLSA for tipped workers.