Denning, Arkansas: Understanding Minimum Wage for Tipped Workers
Explore the specific state laws governing tipped employee pay in Denning, Arkansas, and what employers and workers need to know
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The question of minimum wage for tipped workers is a common one, particularly in states and localities where specific rules apply. For Denning, Arkansas, the minimum wage regulations are governed by Arkansas state law, as there are no specific local minimum wage ordinances that supersede the state's provisions for Denning.
Arkansas State Minimum Wage Law
Arkansas operates under its own state minimum wage law, which often sets a higher standard than the federal minimum wage. As of January 1, 2021, the general minimum wage in Arkansas is $11.00 per hour. This rate applies to most businesses within the state that have four or more employees.
Tipped Employees and the "Tip Credit"
For tipped employees in Arkansas, the law allows for a "tip credit." This means employers are permitted to pay a lower direct cash wage, with the expectation that the employee's tips will bring their total hourly earnings up to or exceed the full state minimum wage.
In Arkansas, the required base cash wage for tipped employees is $2.63 per hour. This rate is significantly higher than the federal minimum cash wage for tipped employees ($2.13 per hour). The difference between the full state minimum wage ($11.00) and the direct cash wage for tipped employees ($2.63) is the maximum tip credit an employer can claim, which is $8.37 per hour.
Employer Obligations
It is crucial for employers in Denning, and throughout Arkansas, to understand their obligations regarding tipped employees:
Guaranteed Minimum: If an employee's tips, combined with their direct cash wage of $2.63 per hour, do not equal at least the full Arkansas minimum wage of $11.00 per hour for all hours worked in a pay period, the employer is legally required to make up the difference. This ensures that no tipped employee earns less than the full state minimum wage.
Notice to Employees: Employers must inform their tipped employees of the direct cash wage being paid and the amount of the tip credit being claimed.
Tip Retention: Generally, tips must be retained by the employee, or, in the case of a valid tip pool, shared only among employees who customarily and regularly receive tips. Employers, managers, and supervisors cannot participate in tip pools.
Conclusion
In summary, Denning, Arkansas, does not have a separate, unique minimum wage for tipped workers outside of the statewide regulations. Tipped employees in Denning, like all others in Arkansas, are subject to the state's minimum wage laws. This means they must be paid a direct cash wage of at least $2.63 per hour, and their total earnings (cash wage plus tips) must meet or exceed the state's general minimum wage of $11.00 per hour. Employers are responsible for ensuring that this threshold is met, making up any shortfall if tips do not cover the difference.
Information published to or by The Industry Leader will never constitute legal, financial or business advice of any kind, nor should it ever be misconstrued or relied on as such. For individualized support for yourself or your business, we strongly encourage you to seek appropriate counsel.
