Mike,

Here is a quick overview.

The Federal Minimum Wage for an enterprise grossing more than $500,000 per year is $5.15 per hour. State Minimum Wage laws vary from state to state.

For a tipped employee, the Federal Minimum Wage is $2.13 per hour, but only if the employee is able to make the other $3.02 per hour in tips. If they don't, the employer must make up the difference.

The employer must keep track of each employees tips and deduct Taxes from them when the employees are paid.

I find it too much of a hassle to try and keep up with it all, so I start my tipped employees out at the same rate I do any other employee.

My carhops make an amazing amount of tips. Especially when you consider their age, usually under 18, and the average ticket size which is usually around $6. At first they were worried that the credit card terminals would reduce their tips, especially since we do not allow tips to be added to the amount of the charge. But, I think maybe the opposite has happened and the customer is more likely to give the carhop a buck or two as a tip instead of simply telling them to keep the change which would be an average tip of 50 cents.

Quite often we need a cook to run around and carry an order because the carhops are backed up. My cooks love this because if they get to carry 3 or 4 orders that night they will usually make enough in tips to buy their smokes for the day.

Greg