The calculation can also be different for tipped employees. The employer may be able to claim a maximum “tip credit” of $5.12 per hour allowed under federal law. In calculating the overtime rate for a tipped employee, an employer must multiply the minimum wage ($7.25 per hour), subtract the tip credit ($5.12 per hour), and multiply that figure by the number of overtime hours worked.
To read more about “Overtime” under the FLSA, please see U.S. Department of Labor Fact Sheet #23.
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