Tipped Employees A tipped employee is one who engages in an occupation in which tips of more the $30 a month are customarily and regularly received. An employer may consider, within prescribed limits, the tips received by a tipped employee as part of the employee's wages. In 1996, the Small Business Job Protection Act froze the minimum cash wage required for tipped employees at $ 2.13 per hour. If the employee receives more than $ 30 /month in tips, the employee is required to report their tips to the employer each month. If tips received do not amount to at least $ the equivalent hourly tip rate, at a minimum, equals $ per hour, the employer must increase the hourly rate of pay so hourly wage plus per hour. Let's assume that Carly Employee, Example's daughter, earned a weekly wage of $100 for a 40-hour workweek. In addition, this week she receives tips of $125.00. Even though the tip wage rate ($3.13) exceeds the hourly rate paid ($2.50b), the employer must pay an additional $65.00 so that tips received plus the wages paid equal the minimum hourly rate wage times the hours worked.