What is the Kansas Tipped Minimum Wage?

Paying tips is not as common in countries outside of the United States; however, it is very common practice in the U.S., with a huge number of workers making the majority of their income through tips. This is without a doubt the case in Kansas, particularly in the hospitality industry.

Hospitality workers, including restaurant, bar, cafe, hotel, cruise, bellhop, and other service provider employees usually are aware that they will be paid a small hourly wage, which is heavily supplemented through the addition of tips that are paid by the customers they serve.

The majority of service-industry workers who are paid the Kansas tipped minimum wage will base most of their take-home pay on tips and will rely on them to cover their cost of living and lifestyle. Currently, the minimum wage in Kansas is $7.25 per hour for non-tipped employees. The Kansas tipped minimum wage is $2.13 per hour, and the Kansas tip credit is $5.12.

What makes a Kansas Tipped Employee?

When you consider what makes a tipped employee, it is someone that earns their wages through tips rather than a fixed salary or higher hourly rate. Federal law has established the rules behind what is considered to be a tipped employee vs. a non-tipped employee.

So, in Kansas, if an employee receives $20 or more per month in tips, they are considered to be a tipped employee by federal and state standards. These employees often include workers such as bartenders, restaurant servers, hotel workers, valet car parking attendants, and any other service-related industry. The Kansas laws that surround the definition of a tipped employee follow these federal guidelines.

Tipped Employees & the Tipped Minimum Wage in Kansas

To abide by the Kansas minimum wage laws, employers must ensure that their employees are being paid at the very least the state minimum wage rate when you include tips, which is also known as the Kansas tipped minimum wage for employees.

If these employees do not make the minimum wage pay rate in tips, then it is the responsibility of the employer to make up the difference, ensuring that the employee is being paid the full minimum wage rate for Kansas.

There are several different employment law factors that have a direct impact how employers in Kansas handle their tipped employees. Knowledge of the minimum wage in Kansas, the federal laws controlling wages, and how pay and wages work for tipped employees is pivotal if you are already running or considering starting a service-related business with tipped employees.

As noted in the graphic above, the Kansas tipped minimum wage is $2.13 per hour and has not increased in the past several years. The Kansas minimum wage is $7.25 per hour for non-tipped employees, and the Kansas tip credit is $5.12.

Fair Labor Standards Act (FLSA) and Tipped Employees

The Federal Fair Labor Standards Act, also known as the FLSA, is a federal law from the U.S. Department of Labor. This law establishes a national minimum wage, defines classifications for employees, and covers other essential standards and requirements for employers.

Federal law requires that employers in Kansas make their tipped employees aware of the cash wage paid. They must also let them know about the tip credit, and explain any tip pooling systems at the workplace. Currently, the national direct hourly salary is only $2.13 per hour.

Tip Credits and the Minimum Cash Wage in Kansas

Since the rules for tipped employees are different than non-tipped employees, there are other ways that Kansas employers can calculate the minimum amount earned by a tipped employee. One of these ways, and perhaps the most significant method is through tip credits.

So, what do tipped employees make in Kansas? The Kansas tip credit is the same as the federal tip credit, which is currently $5.12 per hour (71% of the applicable minimum wage) – this means that employers can claim a $5.12 hourly credit against the tipped employee’s minimum wage. This credit effectively turns the $7.25 minimum wage into a $2.13 per hour minimum wage (29%) that employers must pay to tipped employees no matter how much they earn.

Let’s assume a bartender in Kansas earns less than $5.12 per hour during the working week as their tipped wage (an accumulation of their tips). In that case, the employer must pay the difference between what they made and the total $7.25 per hour. This is tipped credit.

A minimum cash wage ensures that Kansas tipped employees earn a wage, even if a slow workweek or other downturn occurs and they do not receive sufficient tips in a certain week or pay period. This minimum wage rate ensures that servers and others in tipped roles in Kansas that do not make enough with tips can still earn a minimum weekly wage when working full-time of $290 ($7.25 x 40 hours).

Alternatively, some tipped employees in Kansas will work more than 40 hours per week, especially if they are covering shifts for other employees, and may qualify for overtime pay.

The following table illustrates the tipped minimum wage rates for Kansas over the past few years.

What Does This Mean if you are a Business Owner?

If you are planning to buy or start a new business in Kansas due to the opportunities the state has to offer, or just simply considering moving to and finding a job in Kansas, you will need to be aware of the details surrounding the tipped minimum wage in the Sunflower State.

While you may want to speak with an employment attorney or accounting firm for legal and tax advice about your business, understanding the minimum wage laws for tipped employees can, and will certainly aid you in making an informed decision whether or not to start a business in Kansas that has tipped employees.

Most U.S. states and territories require that tipped employees make either the full state minimum wage or make a minimum cash wage higher than the FLSA’s requirements. Regardless of where you locate your business in the U.S., you will most likely need to have a pay rate for tipped employees higher than the federal tipped employee rate.

If you have a claim related to employment, you can find out more information on the Kansas Department of Labor website.