New Mexico's tipped wage is a generous $3.00 per hour, exceeding federal requirements.
New Mexico sets a cash wage of $3.00 per hour for tipped employees, significantly higher than the federal minimum of $2.13. This allows employers to take a larger tip credit, up to $9.00 per hour, to meet the state's general minimum wage of $12.00. However, local ordinances, like Albuquerque's $7.20 tipped wage, can supersede the state rule.
NM Tipped Wage $3.00
Ensures tipped employees receive a cash wage of at least $3.00/hour, allowing for a tip credit against the state minimum wage.
What those rules do as a New Mexico shift is created.
Teambridge automatically calculates the correct cash wage and tip credit for your tipped employees in New Mexico, ensuring compliance with state and local regulations, and optimizing payroll.
Minimum Cash Wage Enforcement
For every hour worked by a tipped employee, Teambridge ensures the payroll system accounts for a cash wage payment of at least $3.00 per hour, or the applicable local tipped minimum wage if higher.
Optimized Tip Credit Application
Teambridge calculates the maximum allowable tip credit (up to $9.00 per hour, or the difference between local general and tipped minimum wages) to ensure the employee's total compensation meets the state or local minimum wage, reducing direct wage costs for employers.
Local Ordinance Precedence Check
Before applying the state's $3.00 tipped wage, Teambridge checks for local ordinances like Albuquerque's, which mandate a higher tipped wage ($7.20/hr), and applies the more generous local rule when applicable to the employee's work location.
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New Mexico mandates a $3.00 minimum cash wage for tipped employees.
New Mexico law allows employers to pay a reduced cash wage to employees who regularly receive tips, provided their total compensation (cash wage plus tips) meets or exceeds the applicable minimum wage. This rule is more generous than the federal standard.
NMSA 50-4-22(C)
An employer may take a tip credit toward the minimum wage payable to a tipped employee. The employer shall pay a cash wage of not less than three dollars ($3.00) an hour to a tipped employee. If the tipped employee's tips combined with the employer's cash wage of at least three dollars ($3.00) an hour do not equal the minimum wage, the employer shall make up the difference.
Who Qualifies as a Tipped Employee?
An employee qualifies as a "tipped employee" under New Mexico law if they customarily and regularly receive more than $30 per month in tips. This threshold determines eligibility for the reduced cash wage and tip credit provisions.
Tip Credit Calculation and Limitations
The maximum tip credit an employer can take is the difference between the state minimum wage ($12.00/hr) and the state's tipped cash wage ($3.00/hr), resulting in a maximum credit of $9.00/hr. However, employers must ensure that the employee's actual tips, when combined with the cash wage, always meet at least the full state minimum wage. If local ordinances impose a higher minimum wage or a higher tipped cash wage, those local rules take precedence, affecting the maximum allowable tip credit.
Teambridge ensures New Mexico tipped wage compliance, automatically.
From initial shift scheduling to final payroll, Teambridge integrates New Mexico's tipped wage laws directly into your operational flow, preventing errors and ensuring full compliance without manual oversight.
Location-Based Wage Configuration
Upon onboarding, Teambridge automatically configures the correct tipped minimum wage for each New Mexico location, taking into account state ($3.00/hr) and any superseding local ordinances (e.g., Albuquerque's $7.20/hr).
Tipped Employee Designation
When scheduling, employees designated as "tipped" are automatically flagged. Teambridge then ensures that their scheduled hours are aligned with the correct tipped wage rules for their work location.
Real-time Tip Tracking & Adjustment
As tips are reported, Teambridge monitors total compensation. If cash wages plus reported tips fall below the applicable minimum wage, the system flags the shortfall and prompts for an employer adjustment to meet the minimum.
Automated Payroll Calculation
At payroll processing, Teambridge calculates the precise cash wage and applies the maximum allowable tip credit, ensuring each tipped employee's paystub reflects full compliance with New Mexico law, including any necessary makeup pay.
People also ask.
What is the minimum cash wage for tipped employees in New Mexico?
As of January 1, 2023, the minimum cash wage for tipped employees in New Mexico is $3.00 per hour. This is higher than the federal minimum cash wage for tipped employees.
How much can an employer take as a tip credit in New Mexico?
Employers can take a tip credit of up to $9.00 per hour. This is the difference between the state's general minimum wage ($12.00/hr) and the tipped minimum cash wage ($3.00/hr). The employee's cash wage plus tips must always equal at least the full state minimum wage.
Does the New Mexico tipped wage apply everywhere in the state?
The state's $3.00 tipped wage is the baseline, but local ordinances can mandate a higher tipped cash wage. For example, in Albuquerque, the tipped cash wage is $7.20 per hour, which supersedes the state rule for employees working within Albuquerque city limits.
What if an employee's tips and cash wage don't meet the minimum wage?
If a tipped employee's tips combined with their employer's cash wage (at least $3.00/hr) do not equal the applicable minimum wage (state or local), the employer is legally required to make up the difference to ensure the employee reaches the full minimum wage.
How is a "tipped employee" defined in New Mexico?
Under New Mexico law, an employee qualifies as a "tipped employee" if they customarily and regularly receive more than $30 per month in tips.
Are there any special rules for dual-job employees (e.g., server and host)?
Yes. If an employee performs both tipped and non-tipped duties, the employer can only take a tip credit for the time spent on tipped duties. For time spent on non-tipped duties, the employee must be paid the full applicable minimum wage.