If you work as a tipped employee in Nebraska it’s essential to understand your minimum wage rights. Unlike standard hourly workers employees who earn tips have a different wage structure that includes both a base wage and tip credits.
This guide will explain the minimum wage for tipped employees in Nebraska how tip credits work and what employers are legally required to pay.
1. What Is the Minimum Wage for Tipped Employees in Nebraska?
As of 2024 Nebraska’s minimum wage for tipped employees is $2.13 per hour in direct wages. However with tip credits employees must earn at least $10.50 per hour which is Nebraska’s standard minimum wage.
Breakdown of Nebraska’s Tipped Wage
- Base wage: $2.13 per hour (paid by employer)
- Tip credit: Up to $8.37 per hour (covered by employee’s tips)
- Total earnings: Must equal at least $10.50 per hour
If a tipped worker does not earn enough in tips to meet the $10.50 per hour requirement the employer must make up the difference.
2. What Are Tip Credits and How Do They Work?
Tip credits allow employers to count a portion of an employee’s tips toward meeting the minimum wage requirement. In Nebraska:
- Employers can claim a tip credit of up to $8.37 per hour.
- Employees must earn enough tips so that their total hourly wage (base wage + tips) meets or exceeds the state minimum wage.
- If tips are insufficient the employer must pay the difference.
For example:
- If a server works 8 hours and makes $30 in tips their total earnings would be $2.13 x 8 + $30 = $47.04.
- However to meet the state minimum wage ($10.50 x 8 = $84) the employer must make up the $36.96 shortfall.
3. Upcoming Increases in Nebraska’s Minimum Wage
Nebraska voters approved a gradual minimum wage increase through Initiative 433 which means the minimum wage will rise yearly until 2026:
| Year | Standard Minimum Wage | Tipped Employee Base Wage |
|---|---|---|
| 2024 | $10.50 | $2.13 |
| 2025 | $12.00 | To be determined |
| 2026 | $15.00 | To be determined |
While the base wage for tipped employees has not been officially set beyond 2024 it may increase in proportion to the standard minimum wage. Employees should stay updated on Nebraska labor laws to ensure they receive fair wages.
4. Who Qualifies as a Tipped Employee in Nebraska?
Nebraska follows federal labor laws which define tipped employees as workers who:
- Regularly earn more than $30 per month in tips.
- Work in industries such as restaurants bars hotels and personal services (salons spas etc.).
Examples of Tipped Employees
- Servers & Waitstaff
- Bartenders
- Baristas
- Hotel Bellhops
- Casino Dealers
- Nail Technicians & Hairdressers
If an employee does not receive enough tips to meet Nebraska’s minimum wage they must be paid the full state minimum wage by their employer.
5. Tip Pooling and Sharing Rules
In many businesses tip pooling is a common practice where employees share their tips. Nebraska allows tip pooling but there are some rules:
- Employers cannot take a share of tips.
- Tips must be distributed fairly among tipped employees.
- Employees must still receive at least the minimum wage ($10.50 per hour total) after tip sharing.
If an employer forces workers to share tips with non-tipped employees (like managers or kitchen staff) it may violate state and federal labor laws.
6. Can Employers Deduct for Credit Card Processing Fees?
Many customers tip using credit cards which come with processing fees for businesses. Under federal law employers can deduct a proportionate fee from employees’ tips but Nebraska law does not explicitly allow or prohibit this practice.
Employees should check with state labor agencies to ensure they receive fair compensation for their earned tips.
7. What to Do If You Are Not Paid the Correct Wage
If you suspect that your employer is not paying you the correct minimum wage you have several options:
a) Talk to Your Employer
Sometimes payroll mistakes happen. Speak to your manager or HR department to clarify any wage discrepancies.
b) Contact Nebraska’s Department of Labor
If your employer refuses to pay the correct wages you can file a wage complaint with the Nebraska Department of Labor.
c) Seek Legal Help
If you have repeated wage violations consider speaking with a labor attorney who specializes in employment law.
8. Key Takeaways
- Nebraska’s tipped minimum wage is $2.13 per hour but total earnings must meet $10.50 per hour.
- Employers can claim a tip credit of up to $8.37 per hour but must make up the difference if tips fall short.
- The state’s minimum wage will increase to $15 by 2026 which may affect tipped wages.
- Tip pooling is allowed but employers cannot take tips or require employees to share with non-tipped staff.
- Employees who are underpaid can file a complaint with the Nebraska Department of Labor.
Understanding Nebraska’s minimum wage laws for tipped employees is crucial for workers in restaurants bars hotels and service industries. While employers can use tip credits they must ensure that all employees earn at least the state minimum wage.
If you’re a tipped worker stay informed about wage increases tip pooling rules and your rights under Nebraska labor laws to ensure you’re being fairly compensated for your work.
