Tipped Minimum Wage by State: The $2.13 Rule and Where It Doesn’t Apply

Here’s a number that hasn’t changed in 35 years: $2.13. That’s the federal minimum cash wage for tipped workers — servers, bartenders, bussers, delivery drivers — set in 1991 and never updated since. Your employer can legally pay you $2.13 an hour as long as your tips bring you up to the regular minimum wage.

But “can” and “does” are very different depending on where you work. In Washington state, a server’s base pay is $17.13 an hour before a single tip. In Texas, it’s $2.13. Same job, same tips, wildly different safety nets.

How the tip credit actually works

The tip credit is the gap between the regular minimum wage and the tipped cash wage. Federally, that’s $7.25 minus $2.13, or $5.12 — the maximum your employer can count your tips toward meeting the minimum wage.

The key protection: if your cash wage plus tips doesn’t reach the full minimum wage in a given workweek, your employer must make up the difference. A slow Tuesday where nobody tips doesn’t mean you go home with $2.13 an hour. It means your employer owes you the shortfall.

At least, that’s the law. Enforcement is another story — the Department of Labor routinely finds tip-credit violations among its most common wage-theft categories.

The 7 states with no tip credit

Seven states don’t play the tip-credit game at all. In Alaska, California, Minnesota, Montana, Nevada, Oregon, and Washington, your employer must pay you the full state minimum wage — tips are entirely on top.

This matters more than it sounds. A California server earning $16.90 an hour base pay plus tips is in a fundamentally different position from a Georgia server earning $2.13 base plus tips. When business is slow, the California server still takes home $16.90 an hour. The Georgia server’s employer only has to top them up to $7.25.

These seven states also tend to have the highest tipped cash wages in the country: Washington ($17.13), California ($16.90), Oregon ($15.95), and Alaska ($14.00, raised July 1, 2026).

The 16 states at $2.13

Sixteen states use the federal $2.13 tipped cash wage (some by having no state law, others by writing $2.13 into their own statutes): Alabama, Georgia, Indiana, Kansas, Kentucky, Louisiana, Mississippi, Nebraska, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Utah, Virginia, and Wyoming.

Many of these states have no state minimum wage above the federal $7.25 — though there are exceptions (Nebraska’s is $15.00, Virginia’s $12.77). Where the $7.25 floor applies, the tip-credit math is at its starkest: $2.13 cash, $5.12 maximum credit, $7.25 floor.

Everyone in between

The remaining states set their own tipped cash wage somewhere between $2.13 and their full minimum wage. Some notable ones:

Florida sits at $11.98 (as of September 30, 2026), with a $3.02 maximum tip credit. New York varies by industry and region but runs $10–$11 for most tipped hospitality workers. Colorado is at $12.14 with a $3.02 credit. Hawaii pays $14.75 cash with a max $1.25 tip credit (minimum wage $16.00). The credit is only allowed if the worker’s total hourly compensation — cash plus tips — reaches at least $23.00, which is $7 above the minimum wage.

Connecticut splits it by role: $10.56 for hotel and restaurant workers, $8.71 for bartenders. D.C. is at $10.30 but phasing out the tip credit entirely by July 1, 2027 — after that, D.C. joins the no-tip-credit states.

What to check on your pay stub

If you earn tips, three numbers on your pay stub tell you whether you’re being paid correctly:

1. Your cash hourly rate. Is it at least your state’s tipped minimum? In a $2.13 state, $2.13 is the legal floor — but many employers pay more voluntarily.

2. Total earnings divided by total hours. Cash wages plus reported tips, divided by hours worked, must equal at least the full minimum wage (federal or state, whichever is higher). If it doesn’t, your employer owes you the difference — for that workweek, not averaged across pay periods.

3. Tip pooling deductions. Employers can require tip pooling among customarily tipped employees, but they can’t take a cut for themselves (unless they’re also doing tipped work). Under the DOL’s 2021 tip regulations (implementing 2018 law changes), employers who take a tip credit can’t include non-tipped workers like cooks in the pool.

Common violations to watch for

The most common tip-credit violations the DOL investigates: employers failing to top up when tips fall short, counting non-tipped work (like hours of side work or cleaning) toward the tip credit, and illegal tip-pooling that funnels tips to managers or the house.

Another one to know about: the “80/20 rule” used to limit how much non-tipped side work (rolling silverware, cleaning, prep) could be paid at the tipped rate — but the Fifth Circuit vacated the DOL’s 80/20 rule in August 2024, so it no longer applies nationwide. Some states may still enforce similar standards under their own laws.

Frequently asked questions

Can my employer pay me $2.13 if my state minimum wage is higher?
Only if your state allows it and sets the tipped cash wage that low. In the 7 no-tip-credit states, no — you must get the full minimum wage. In $2.13 states, yes, $2.13 is legal as long as tips bring you to $7.25.

What if I have a bad week and my tips are terrible?
Your employer must make up the difference so you earn at least the full minimum wage for every hour worked that week. This is calculated per workweek, not per shift or per pay period.

Do I have to share tips with the kitchen?
It depends. If your employer takes a tip credit (pays you below full minimum wage), the pool can only include customarily tipped employees — servers, bartenders, bussers. Cooks and dishwashers can’t be in the pool. If your employer pays you the full minimum wage with no tip credit, broader pooling is allowed.

Are tips on credit cards handled differently?
Your employer can deduct the credit-card processing fee attributable to your tips (usually 2–4%), but can’t deduct more than that. Some states restrict even this.

Is the $2.13 rate ever going up?
Not federally — it hasn’t changed since 1991 and there’s no current federal proposal with momentum. But states keep moving: D.C. eliminates its tip credit in 2027, and several states raised tipped wages on January 1, 2026. The action is at the state level.

For the full state-by-state breakdown with cash wages, tip credit maximums, and official sources, see our tipped minimum wage by state table — all 50 states and D.C., verified against state labor departments and the U.S. DOL.