Question

2. Katie works at the Four Seasons Spa. On a particular week she worked 30 hours as a waitress and collected $560 in tips. What is her gross pay for the week? 30 x 725 x 213 21750 6390 +560 562390 What is the amount of her excess tips over the tip credit?

$2.13 is the amount paid per hour by employer.

Answer 1

Federal min wage is 7.25$ per hour . Therefore, 30 hours* 7.25$ = 217.50$ is federal minimum wage.

Now, minimum cash wage is 2.13$ , Therefore 30 hours * 2.13$ = 63.9 $

Tips = 560 $

Tip credit is 7.25$-2.13$ = 5.12$ per hour

so total tip credit is 30*5.12$ = 153.60$

Gross pay for the week = 63.90$ + 560$ = 623.90$

As the pay for the week is higher than the minimum federal wage i.e. 217.50$ , employer is eligible for total tip credit of 153.60$.

Yes , employer can apply tip credit of extra 10 hours as extra 10 hours would bear cost of 7.25$ * 10 = 72.50 $ and employer has tip credit of 153.60$.