What is the maximum tip wage credit allowed per hour?

The maximum tip wage credit allowed per hour is indeed $5.12. This figure is significant because it represents the amount that employers in the hospitality industry can credit toward the minimum wage obligations for employees who receive tips, such as servers and bartenders.

The Federal Fair Labor Standards Act (FLSA) sets guidelines for tipped employees, allowing employers to count a portion of employees' reported tips towards the minimum wage, thus reducing the direct hourly wage they are required to pay. The tip wage credit is adjusted periodically, which is why it’s essential for payroll professionals to stay informed about the prevailing laws and any updates regarding the maximum amount allowed.

In the context of regulation and compliance, understanding the correct wage credit amount is crucial for both adherence to labor laws and for ensuring that employees receive fair compensation for their work. Being aware that the tip credit can change allows employers and payroll professionals to adjust payroll calculations accordingly, ensuring compliance with both federal and state laws surrounding tipped employees.