The Department of Labor and Work Force Development has adopted new rules affecting how tipped workers are impacted by the state’s minimum wage law.
Under the rules adopted Aug. 3, only an employee who “customarily and regularly” receives $30 per month in tips can be counted as a tipped employee. Otherwise, the employee must be paid the prevailing minimum wage.
Employers are also required to comply with the following new rules if they have tipped employees:
- Employers cannot use employees’ tips to cover any expenses other than contributions to a valid tip pool
- Compulsory charges for service do not count as tips
- Employees who perform two jobs at the same establishment are only to be considered tipped employees for the job where they earn $30 per month in tips
- Employers who take the tip credit must inform their tipped employees in advance the cash wage the employer will pay to the tipped employee, and the amount of the tip credit the employer will claim, which cannot exceed the actual value of tips received by the employee.
The new rules also change the way that the minimum wage will be calculated for employees of small and seasonal employers beginning Jan. 1, 2027, and for farm laborers beginning Jan. 1, 2025 in order to eventually bring their wages up to the same level as the minimum wage for regular workers.
Finally, the new rules state that training wages can be paid to employees participating in an established employer on-the-job or other training program, defined as a program that provides the employee an industry-valued training credential or a credit that can be applied to earning an industry-valued training credential.
For more information, see NJBIA’s Fast Fact on the minimum wage here.