LO 3-4 What are the two methods an employer may use to determine a tipped employee’s overtime compensation?

1. Compute gross pay based on the minimum cash wage plus tips.

2. Compute gross pay based on an average of the minimum cash wage and the maximum tip credit.

3. Compute gross pay based on the minimum cash wage, excluding tips.

4. Compute gross pay based on the minimum cash wage multiplied by the overtime rate (i.e., 1.5).