Georgia Overtime Rules for Tipped Employees: What Employers Need to Know

Georgia Overtime Rules for Tipped Employees: Key Takeaways

• Georgia follows federal FLSA overtime rules for tipped employees, paying 1.5 times the regular rate for hours over 40 per week.
• Overtime pay is calculated based on the full minimum wage ($7.25) multiplied by 1.5, minus the tip credit of $5.12.
• Employers must notify tipped employees in writing about tip credit policies to claim the credit lawfully.

Understanding Georgia overtime rules for tipped employees is essential for compliance with federal labor standards.

Jobs for tipped employees should be posted with clear pay details and tip policies to attract qualified candidates and stay compliant.

This article explains how overtime pay is calculated and the key employer obligations.

1. Overview of Overtime Pay for Tipped Employees in Georgia

Georgia does not have specific state laws on overtime pay for tipped workers. Instead, it adheres to the federal Fair Labor Standards Act (FLSA) regulations.

Under the FLSA, non-exempt employees, including tipped workers, must receive overtime compensation at time and a half for any hours worked beyond 40 in a workweek.

This ensures workers are fairly compensated for extra hours, regardless of whether they receive tips.

To avoid wage violations, review the risks of working off the clock and ensure all time is properly recorded and paid.

2. Minimum Wage and Tip Credit Basics in Georgia

The federal minimum wage of $7.25 per hour applies to Georgia employees.

Employers may pay tipped employees a base cash wage of $2.13 per hour, utilizing a tip credit of up to $5.12 to meet the minimum wage requirement.

This means the sum of the cash wage and tips must equal at least $7.25 per hour; if not, the employer must make up the difference.

For broader context on pay floors, see the minimum wage for servers across the U.S.

3. Calculating Overtime Pay for Tipped Employees in Georgia

When tipped employees work overtime, the calculation of their pay changes compared to regular hours.

Instead of basing overtime pay on the $2.13 cash wage, it is calculated on the full minimum wage of $7.25.

The overtime rate is 1.5 times the minimum wage: $7.25 × 1.5 = $10.88 per hour.

Since employers claim a tip credit of $5.12 per hour, this credit is subtracted from the overtime rate:

• Overtime cash wage = $10.88 - $5.12 = $5.76 per overtime hour

Thus, for each overtime hour worked, the employer must pay a direct cash wage of $5.76, in addition to the employee’s tips earned during those hours.

Employers cannot increase the tip credit beyond $5.12 for overtime hours.

Clarify role expectations with this bartender job description when setting overtime and tip policies.

Example of Overtime Pay Calculation for Tipped Employees

If a tipped employee works 45 hours in a week:

• 40 hours are paid at a cash wage of $2.13 plus tips.
• 5 overtime hours are paid at $5.76 per hour cash wage plus tips.

This ensures overtime compensation accounts for the full minimum wage rate multiplied by time and a half.

4. Key Notifications and Employer Requirements in Georgia

Employers must provide written notice to tipped employees outlining:

• The intention to use the tip credit.
• The amount of the tip credit claimed.
• The employee’s right to retain all the tips they receive.

If this notification is not given, employers lose the ability to claim the tip credit and must pay the full minimum wage in cash for all hours worked.

5. Tip Pooling and Record-Keeping for Tipped Employees in Georgia

Employers may establish tip pooling among employees who customarily receive tips, such as servers or bartenders.

For role clarity, see the server job description when defining pool eligibility.

However, employees who do not usually receive tips (like cooks or dishwashers) cannot be included in the pool.

Learn duties and expectations in the dishwasher job description to keep pools compliant.

Accurate records must be maintained for each employee, documenting hours worked, wages paid, and tips received to ensure compliance.

For accurate distributions, use this tip pooling spreadsheet template.

6. Compliance Best Practices for Georgia Employers

• Ensure all tipped employees receive written notification about tip credit policies.
• Calculate overtime pay using the full minimum wage times 1.5 minus the tip credit.
• Implement transparent tip-pooling arrangements involving only eligible employees.
• Keep detailed records of payroll, tips, and hours worked for review.

When staffing front-of-house, reference the cocktail server job description to align training with pay practices.

7. Legal and Government Resources for Georgia Overtime Laws

• U.S. Department of Labor – Fair Labor Standards Act (FLSA): https://dol.georgia.gov/faqs-individuals/individuals-faqs-fair-labor-standards-act
• Georgia Department of Labor – Fair Labor Standards Act FAQs: https://dol.georgia.gov/faqs-individuals/individuals-faqs-fair-labor-standards-act
• U.S. Department of Labor – Tipped Employees Under the FLSA: https://www.minimum-wage.org/georgia/tipped-employee-minimum-wage

Georgia Overtime Rules for Tipped Employees: Conclusion

While Georgia does not have specific state-level overtime laws for tipped employees, federal FLSA rules fully apply.

Employers must pay overtime at 1.5 times the full minimum wage minus the tip credit and provide required written notifications.

By following these regulations and maintaining clear records, Georgia employers can ensure fair treatment of tipped workers and stay compliant with labor laws.