Connecticut Tip Laws

Under the Fair Labor Standards Act (FLSA), tips are regulated. Employers who meet certain criteria are permitted to take a partial credit against minimum wage obligations for tipped employees. Tipped employees includes those engaged in jobs in which they regularly and customarily receive tips.

The tip credit was created by Congress in 1966, and adjustments occurred on December 28, 2021, when the 2021 Dual Jobs Final Rule went into effect. A federal court vacated portions of the final rule in October 2024, which effectively reinstated the original dual jobs regulation (29 C.F.R.531.56(e). It recognizes that an employee may work in tipped and non-tipped occupations, and employers are only permitted to take the tip credit against minimum wage obligations for hours worked in the tipped occupation.

The FLSA mandates that a tipped worker must be paid at least $2.13 per hour. The FLSA tip credit can be equal to the different between the direct (or cash) wage paid to the employee and the federal minimum wage. Only tips actually received by an employee count when making the determination of a tipped employee and applying the credit.

The FLSA also permits employees to “pool” or share tips with other eligible employees, although it doesn’t impose a limit on the amount or percentage of the contribution of each employee in a valid tip pool.

State law may differ from the federal FLSA standards. Review what tip laws apply in Connecticut.

When Were the Tip Laws Last Updated in Connecticut?

Tip laws in Connecticut were updated in September 2020.

Does Connecticut Have Tip Laws That Differ from Federal Tip Laws?

Yes, Connecticut has laws in place that differ from the regulations under the FLSA. Since the state minimum wage is higher than the federal minimum wage, employers must comply with the state hourly rate.  An employer is permitted to take a tip credit, although the amount varies based on the type of tipped employee.

• Hotel and restaurant service waitstaff: $9.31 per hour tip credit
• Bartenders: $7.46 per hour tip credit

To be considered a tipped employee, an individual must perform at least one of the 23 services outlined in the Department of Labor’s regulations, Title 31.

Who Holds the Ownership of Tips in Connecticut?

Under state law, any gratuities paid to employees are their property. Employers are not permitted to keep tips.

What are the Rules for Distribution of Credit Card Processing Tips in Connecticut?

A tip given to an employee must be paid out by the end of the pay period during which it was paid.

What are the Tip Pooling Rules in Connecticut?

Employers in Connecticut are permitted to establish mandatory tip pools. Eligible employees share a portion of their tips, which are distributed among the group.

Who Can and Can’t Participate in Tip Pools in Connecticut?

Employees who complete at least one of the services outlined in the Department of Labor’s regulations, Title 31 may participate in tip pools. Managers, owners, and supervisors can’t participate.

Is there a Difference Between Tips and Service Charges in Connecticut?

Yes, a mandatory service charge is not considered a tip. Therefore, it would belong to the employer.

To be considered a tip instead of a service charge, a customer must give money voluntarily in an amount of their own choosing. The customer must also be able to determine who receives it, and it can’t be set by employer policy.

Can Employers Deduct Credit Card Fees from Tips in Connecticut?

Connecticut employers are not allowed to deduct credit card fees from tips.

Do Tips Count Toward the Minimum Wage in Connecticut?

Yes, the tip credit can count toward minimum wage.

Do Tips Factor Into Regular Rate Calculations for Overtime Pay in Connecticut?

Any eligible employee working over 40 hours in a week should receive overtime pay (1.5 times their normal hourly wage). However, a tipped employee’s overtime wage is based on the state hourly rate, not the hourly rate that includes a tip credit.

Are There Cities and Municipalities in Connecticut That Have Their Own Tip and Service Charge Rules That Differ from Statewide Laws?

No, there are currently no cities or municipalities with differing tip or service charge rules.

What Are the Record-Keeping Requirements for Employers Regarding Tips in Connecticut?

Employers must keep detailed records of all tips reported by employees, including amounts and dates of service. If tip pooling is in effect, the record should also include the arrangements and the distribution of tips to eligible staff members.

What Options Do Employees Have for Remuneration if Their Tips are Withheld in Connecticut?

An employee may take legal action against an employer who violates state tip laws.

What are the Penalties for Employers for Not Complying with Connecticut Tip Laws?

Violating Connecticut tip laws can subject an employer to a fine of up to $5,000 per incident. Employers may also be held liable for any tips owed to employees, as well as any applicable attorney’s fees and interest.

Managing the regulations associated with tips in Connecticut can be a challenge. But with WorkforceHub, your business can ensure accuracy. The numerical clock prompt feature allows the employee to input their received tips at the end of the shift, and that information would be available for reporting and payroll processing. Explore our selection of time clocks to find what works for your business.

Connecticut Department of Labor’s regulations, Title 31