NO. Every hourly employee in Massachusetts, including tipped employees, must always receive at least minimum wage, which is $12.75 per hour as of January 1, 2020. (And in January of every year until at least 2023, minimum wage will continue to increase.) A service employee receives a “service rate” of $4.95 an hour (as of January 1, 2020: this wage will also continue to increase every year.) However, the service employee’s actual tips, when added to the service rate of $4.95 an hour, must add up to at least the $12.75 hourly minimum wage. If they do not add up to $12.75 an hour, then the employer needs to pay the employee the difference.
As of January 1, 2019, employers are required to do the calculations to ensure the employee earned at least minimum wage for all the hours worked at the end of each shift. The employer is required to add any amount due to the employee’s next paycheck. This means that the employer cannot add together multiple days to come up with the calculation because tips from a busy day would skew the results to make it seem like the employee earned minimum wage on the slow days too: each shift worked has to have tips plus service wage add up to at least minimum wage.
Here is an example:
This week, Jen the Server works a 5 hour shift at Joe’s Burgers on Wednesday and a 5 hour shift on Friday.
Wednesday is a slow day at Joe’s Burgers. Jen earned $22.00 in tips. Her service rate wages equals $4.95 x 5 = $24.75. Her total for the day is $46.75.
By law, she should have earned $63.75 at the standard minimum wage ($12.75 x 5 hours = $63.75).
The difference between what Jen earned ($46.75) and what she should have earned ($63.75) is $17.00. Joe’s Burgers is required to add $17 to her next paycheck (this number is often called the shift differential.)
On Jen’s busy day, Friday, she earns the same amount of service rate wages as on Wednesday. ($4.95 x 5 = $24.75) However, she earns $125 in tips, for a daily total of $149.75. Since she earned over minimum wage for the day, she is not owed a shift differential for Friday.
Jen’s total gross wages will be $46.75 + $149.75 + $17.00 = $213.50 this week.
That being said, a less scrupulous employer than Joe’s Burgers could try to violate the law and cheat Jen by adding together her daily totals from both days ($46.75+$149.75=$196.50) and dividing it by 10 (5 hour shift + 5 hour shift) = $19.65/hour. This calculation violates the tips law.
This also serves as an example of why it is important to do the service wage + tip calculation at the end of each shift worked.
If you are not making at least minimum wage during every hour you work as a tipped employee (or any employee...) then you need to contact an experienced wage and hour claim lawyer - like Attorney Carlin Phillips - today. The laws governing wage law in Massachusetts are complicated and each situation is different, but Attorney Phillips has handled many cases like yours. He has built his career on standing up for the "little guy" in the face of big corporations -- and he isn't afraid to speak up for your cause. (He also used to be a server.) Give our office a call at 508.998.0800 ASAP - there is a statute of limitations on wage cases so you need to reach out now!