While the federal minimum wage has been stagnant at $7.25 per hour since 2009, in recent years many states, including Rhode Island, have raised their state minimum wage. Rhode Island passed a bill that raises the minimum wage a little bit every year. As of January 1, 2024, Rhode Island’s minimum wage is $14 an hour, increasing to $15 an hour by January 1, 2025. Of course, there are a few exceptions to Rhode Island’s minimum wage laws; for example, full-time students who are under the age of 19 and work in nonprofit religious, library, educational, or community service organizations are entitled to receive only 90 percent of the state’s minimum wage while 14 and 15-year-olds who do not work more 24 hours in a week are entitled to only 75 percent. Exceptions may also apply to workers employed in domestic service positions, resort establishments, or other sectors where compensation may be handled differently. Probably the most well-known exception to the minimum is tipped employees. How do wage laws for these tipped employees differ from those in sectors where tips are not a component of the industry? Understanding and navigating the complexities of labor laws for tipped employees in Rhode Island can be challenging, especially for workers who may not be familiar with their legal rights and options.
If you have questions about the minimum wage for tipped employees, or if you think that your employer is compensating you unfairly, consider discussing the details of your situation with a caring and experienced employment law attorney who can advocate vocally on your behalf. To help you understand the law and better be able to decide if you need legal help to protect your or your loved one’s rights to be paid what you’re owed, below is a guide to the minimum wage for tipped workers in Rhode Island.
Understanding Minimum Wage for Tipped Employees
Employees in Rhode Island are entitled to earn the full minimum wage per hour as set by either state or federal law, regardless of whether they receive tips. Federal law allows employers to pay a reduced wage of $2.13 an hour if the employee earns at least $30 in tips monthly, provided total tips and wages equal or exceed the minimum wage. Since the minimum wage in Rhode Island is considerably higher than the federal minimum wage, employees are entitled to be compensated at this higher rate as established by Rhode Island Law. However, employers have the right to pay tipped workers less than the minimum wage, provided that these employees earn enough through their tips to account for this difference.
According to the State of Rhode Island Department of Labor and Training, “Employers can pay tipped workers a minimum of $3.89 per hour, but your earnings including tips must add up to the regular minimum wage of $14 per hour.” Moreover, “If your wages plus tips don’t add up to the regular minimum wage, your employer is required to pay you the difference.” In other words, all employees are entitled to earn the minimum wage, even if this is achieved through the combination of a lower minimum hourly wage and the tips the employee receives. If you have assessed your payment and you believe that your employer is not compensating you accurately or sufficiently, reach out to an experienced and trusted employment law attorney to determine the most strategic path forward.
Actions Your Employer Can and Cannot Take Regarding Tips
As a tipped employee in Rhode Island, it’s essential that you understand your legal rights when it comes to earning fair compensation. Unfortunately, some employers may engage in unlawful practices that deprive you of the fair earnings to which you are entitled. For example, an employer may argue that they are not obligated to pay you the federal minimum wage for tipped employees (which is currently set at $2.13 an hour) or the state minimum wage for tipped workers (which is $3.89 an hour as of 2024) if you earn more than the minimum wage in tips alone. This is illegal. Your employer must compensate you at a rate of at least $3.89 per hour, even if you earn more than the standard minimum wage in tips alone. Further, your average rate of pay each week must be at least the state minimum wage, currently $14 an hour, when tips and pay are added together and divided by the total hours worked in a week.
In other cases, an employee may wonder whether their employer is entitled to take any of their tips. Employment laws generally prohibit employers from withholding tips. One exception is if the employer is doing so under narrow circumstances to pay for credit card processing fees. An employer wishing to take a portion of tips to cover credit card processing fees may only do so if they notify employees about this action in advance. Many employers impose a flat percentage reduction that is often more than the amount they pay in credit card processing for the tips. This is illegal.
Many employers also want to take tips for a tip pool. While this is legal under narrow and specific circumstances, there are many restrictions, and tip pooling is often illegal. For example, managers and owners cannot be part of the pool and workers like dishwashers, cooks, and chefs also normally cannot be a part of the pool either.
Even if you are not certain that your employer is violating your rights or acting in bad faith, seeking the guidance and support of a trusted and highly-qualified Rhode Island employment law attorney can give you the clarity you need to understand your legal rights and options.
¹ While legislation to remove this exemption and mandate the normal minimum wage for tipped employees has been introduced and even passed in some states and was introduced in Rhode Island in early 2024, nothing has been passed or signed into law in Rhode Island as of yet.
Learn More About Fair Pay in Rhode Island Today
Every worker deserves to be compensated fairly and in accordance with state and federal wage laws. While many employers adhere to these laws, some intentionally steal wages from their workers and others unintentionally make mistakes about the law that deprives employees of being paid what they are owed. If you are struggling with a situation in which you believe your employer has compensated you unfairly or deprived you of the total amount of pay you know you deserve, you have the right to file a wage complaint with the State of Rhode Island Department of Labor and Training or to pursue a claim in State or Federal Court. Although you can move through this process without legal representation, enlisting the support of an experienced and compassionate employment law attorney is highly recommended. Together, you can identify the most appropriate course of action that maximizes your chances of obtaining a fair and favorable outcome.
At Sinapi Law Associates, Ltd., we are committed to championing the rights of employees throughout Rhode Island and protecting their civil liberties at every opportunity. If you have any questions about your rights as an employee, please contact our office at (401) 739-9690 to get started with a dedicated and experienced employment law attorney.
