Nevada 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 Nevada.

When Were the Tip Laws Last Updated in Nevada?

Tip laws in Nevada were updated in July 2024.

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

Yes, Nevada has laws in place that differ from the regulations under the FLSA. The state minimum wage is higher than the federal rate, so employers must adhere to the state rate when paying employees. Additionally, state laws do not allow employers to use tip credits.

Who Holds the Ownership of Tips in Nevada?

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 Nevada?

Employers must distribute tips given to employees as soon as they are received.

What are the Tip Pooling Rules in Nevada?

Employers in Nevada are allowed to establish mandatory tip pools, as long as they are not keeping any of the tips instead of paying them out to employees. Eligible employees share a portion of their tips, which are distributed among the group.

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

Employees who customarily receive tips for the work they perform are allowed to participate. Managers and owners may not participate in tip pools.

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

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 Nevada?

The law does not restrict employers from deducting any credit card processing fees from employee tips.

Do Tips Count Toward the Minimum Wage in Nevada?

No, employers in Nevada are not allowed to count tips toward minimum wage.

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

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 amount, not the hourly rate that includes a tip credit.

Are There Cities and Municipalities in Nevada 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 Nevada?

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 Nevada?

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

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

Violating Illinois tip laws can subject an employer to a penalty of up to $1,100 per violation. Civil penalties and legal fees may also apply.

Managing the regulations associated with tips in Nevada 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.

Nevada Tip Guide: Nevada Revised Statutes (NRS) 608

Department of Business & Industry FAQ