The tips received by a tipped employee are less than $5.12 of the minimum hourly tip credit rate. The maximum permissible tip credit is:
A) $30 a month.
B) $5.12 an hour.
C) 45% of the employee's minimum wage.
D) 50% of the employee's minimum wage.
E) the amount of tips actually received by the employee.

Question

Quizplus · Accepted Answer

The maximum permissible tip credit is the amount of tips actually received by the employee. If the tips received are less than the hourly tip credit rate, the employer can only claim a tip credit equal to the actual tips received, ensuring the employee still earns at least the minimum wage with their wages and tips combined.

The Tips Received by a Tipped Employee Are Less Than