South Carolina allows a $2.13 cash wage for tipped workers, requiring employers to ensure tips make up the difference to the federal minimum wage.
South Carolina employers may pay tipped employees a direct cash wage of $2.13 per hour, provided the combination of this cash wage and tips received equals at least the federal minimum wage of $7.25 per hour. If tips are insufficient, the employer must make up the difference. This policy aligns with federal FLSA standards, as South Carolina does not have its own state minimum wage law.
Tipped Wage + Tip Makeup
Validates $2.13 cash for tipped workers + tip makeup to $7.25. $30/month tip threshold under federal standard.
What those rules do as a South Carolina shift is created.
Teambridge automatically applies the South Carolina tipped wage credit and ensures compliance with federal minimum wage requirements for your tipped employees. Our system monitors earnings to guarantee that the effective hourly rate meets or exceeds the federal minimum wage, preventing costly violations.
Automatic Tip Credit Application
When a tipped employee is scheduled, Teambridge automatically applies the $5.12 tip credit, calculating the cash wage due as $2.13 per hour.
Real-time Tip Reconciliation
As tips are reported, the system continuously verifies that the sum of the cash wage and tips meets the federal minimum wage of $7.25/hour for all hours worked.
Automated Tip Makeup Payments
If an employee's tips, combined with the $2.13 cash wage, fall below $7.25 per hour, Teambridge automatically calculates and schedules the necessary employer "tip makeup" payment to cover the shortfall.
Deploy South Carolina compliance on autopilot.
Stop worrying about keeping up with South Carolina's wage and hour laws. Teambridge bakes compliance directly into your operations, from scheduling to payroll.
South Carolina follows federal FLSA rules for tipped employees.
South Carolina does not have a state-specific minimum wage or tipped wage law, therefore, it defaults to the federal Fair Labor Standards Act (FLSA) for the compensation of tipped employees. This means employers must adhere to the federal minimum cash wage and tip credit provisions.
29 U.S.C. § 203(m)(2)(A)
"In determining the wage of a tipped employee, the amount paid such employee by the employer shall be deemed to be increased on account of tips by an amount determined by the employer, but not by an amount in excess of the value of the tips actually received by such employee, not to exceed $5.12 per hour, except that the amount of the tips received by the employee which is accounted for by the employee to the employer shall be applied in determining whether the employee has received the minimum wage."
Federal Tipped Wage Requirements
Under federal law, employers of tipped employees may take a "tip credit" against their minimum wage obligation. The current maximum tip credit is $5.12 per hour, meaning the employer must pay a direct cash wage of at least $2.13 per hour. The tips received by the employee, when added to the direct cash wage, must equal at least the federal minimum wage of $7.25 per hour. If the sum of the cash wage and tips does not meet this threshold, the employer is responsible for making up the difference.
Tip Threshold and Notice
An employee is considered "tipped" if they customarily and regularly receive more than $30 per month in tips. Employers must inform tipped employees about the tip credit provisions before applying them. This includes notifying employees of the cash wage paid, the amount of the tip credit taken, and that all tips received by the employee must be retained by the employee, except for valid tip pooling arrangements.
Teambridge ensures your South Carolina tipped employees are always paid correctly.
With Teambridge, South Carolina's tipped wage compliance becomes an integrated part of your daily operations. From initial scheduling to final payroll, our system proactively manages tip credits and makeup payments, eliminating manual calculations and compliance risks.
Smart scheduling for tipped roles
When you schedule an employee in a tipped role, Teambridge automatically flags them for the $2.13 cash wage and initiates real-time monitoring of their earnings against the $7.25 federal minimum.
Continuous tip and wage monitoring
Our system tracks reported tips alongside the cash wage for every hour worked. It identifies any shortfalls where combined earnings fall below the federal minimum wage.
Automated tip makeup payments
At payroll processing, Teambridge automatically calculates and adds any necessary tip makeup payments to the employee's paycheck, ensuring they always meet the $7.25/hour federal minimum.
Comprehensive compliance records
All calculations, tip reports, and makeup payments are meticulously recorded and stored for the required three-year period, providing an auditable trail for South Carolina compliance.
People also ask.
What is the minimum cash wage for tipped employees in South Carolina?
In South Carolina, the minimum cash wage an employer must pay to a tipped employee is $2.13 per hour. This is because South Carolina follows the federal FLSA guidelines, which allow for a tip credit against the federal minimum wage.
What happens if a tipped employee's tips and cash wage don't reach $7.25 per hour?
If a tipped employee's cash wage of $2.13 per hour, combined with their tips, does not reach the federal minimum wage of $7.25 per hour for all hours worked, the employer is legally obligated to make up the difference. This is known as a "tip makeup" payment.
Does South Carolina have its own state minimum wage?
No, South Carolina is one of five states that does not have its own state minimum wage law. Therefore, employers in South Carolina must comply with the federal minimum wage of $7.25 per hour, including for tipped employees.
What is the tip threshold for an employee to be considered "tipped" in South Carolina?
Following federal FLSA standards, an employee is considered a "tipped employee" if they customarily and regularly receive more than $30 per month in tips. This threshold determines whether an employer can apply the tip credit.
Are employers required to notify employees about the tip credit?
Yes, under federal law (which South Carolina follows), employers must inform tipped employees in advance if they intend to take a tip credit. This notification should include the cash wage paid, the amount of the tip credit, and that all tips received by the employee must be retained by the employee (except for valid tip pooling).
Can employers include tips in a tip pool in South Carolina?
Yes, employers can implement a valid tip pooling arrangement for tipped employees. However, only employees who customarily and regularly receive tips (e.g., servers, bartenders) can participate in a mandatory tip pool. Employees who do not customarily and regularly receive tips (e.g., cooks, dishwashers) generally cannot be part of such a pool, unless the employer pays all employees the full federal minimum wage and does not take a tip credit.