What’s an employer’s “tip credit” and am I using it correctly?

Under Maryland and Federal wage and hour laws, employers can credit tips paid directly to employees to satisfy a portion of required minimum wages. In addition to tip credits, “tip pooling” is allowed, but avoid a claim under the FAIR LABOR STANDARDS ACT (FLSA) and ensure you use these tools correctly. Correct wage and hour standards and tips accounting can be confusing and are different under Maryland Law than the Federal standards. The FLSA protects employers and employees. Don’t gamble that you’re doing everything correctly. Make sure you understand the law!