Thursday, May 13, 2021
Like the federal Fair Labor Standards Act, Wisconsin law allows hospitality employers to pay certain tipped employees less than the minimum wage with the understanding that the tips they receive will cover the difference. More specifically, Wisconsin law allows employers to claim a tip credit of up to $4.92 per hour for employees who “customarily and regularly receive tips.” Among other things, Wisconsin law requires employers to have a “signed tip declaration” in order to claim the credit. Wisconsin Administrative Code § DWD 272.03(2)(b)(1) states the following:
When the employer elects to take tip credit the employer must have a tip declaration signed by the tipped employee each pay period and show on the payroll records that any required social security or taxes have been withheld each pay period to show that when adding the tips received to the wages paid by the employer, no less than the minimum rate was received by the employee. When the employer’s time and payroll records do not contain these requirements, no tip credit shall be allowed.