Federal & State Regulations | Tips - Indiana | J. J. Keller® Compliance Network

State Info

Summary of difference between federal and state regulations

There are certain instances where employers may pay employees at a rate lower than the minimum hourly wage specified by the federal Fair Labor Standards Act. The most common instance pertains to an employee who earns tips. Employers may deduct the amount of the tips (but only up to a certain maximum amount) from the hourly wage.

Employers must pay at least $2.13 per hour when claiming a tip credit.

Indiana

Employers may require a tipped employee to participate in a tip pooling arrangement if the tips are shared only with other tipped employees and not with nontipped employees.

If, however, employers pay their employees at least the minimum wage, they may require tipped employees to participate in a tip pooling arrangement where the tips are shared with other tipped and nontipped employees.

Employers that implement a tip pooling arrangement must notify tipped employees of any required tip pool contribution amount, may only take a tip credit for tips each employee ultimately receives, and may not retain any of the employees' tips for any other purpose.

Employers and managers may not receive tips from a tip pooling arrangement.