Wis. Admin. Code Department of Workforce Development DWD 272.03 - Minimum rates

(1) MINIMUM RATES. This subsection is effective on July 24, 2009. Except as provided in ss. DWD 272.05 to 272.09, no employer may employ any employee in any occupation, trade, or industry at a lesser hourly rate than as follows:

(a) All employees except opportunity and minor employees $7.25 per hour.

(b) Minor employees $7.25 per hour.

(c) Opportunity employees $5.90 per hour.

(1m) MINIMUM RATES. This subsection is in effect from June 1, 2006, to July 23, 2009. Except as provided in ss. DWD 272.05 to 272.09, no employer may employ any employee in any occupation, trade, or industry at a lesser hourly rate than as follows:

(a) All employees except opportunity and minor employees $6.50 per hour.

(b) Opportunity and minor employees $5.90 per hour.

(2) TIPS. Where tips or gratuities are received by the employee from patrons or others, the employer may pay the minimum wage rate established by this subsection, providing the employer can establish by its payroll records that for each week where credit is taken, when adding the tips received to the wages paid, no less than the minimum rate prescribed in sub. (1), was received by the employee. The minimum rate shall be the rate established in par. (a).

(a) Minimum rates for tipped employees. All employees except opportunity employees $2.33 per hr.

(am) Opportunity employees. Opportunity employees $2.13 per hour.

(b) Burden of proof.

1. When the employer elects to take tip credit the employer must have a tip declaration signed by the tipped employee each pay period and show on the payroll records that any required social security or taxes have been withheld each pay period to show that when adding the tips received to the wages paid by the employer, no less than the minimum rate was received by the employee. When the employer's time and payroll records do not contain these requirements, no tip credit shall be allowed.

2. The department may refuse to take action to collect minimum wage deficiencies for a tipped employee who has refused or failed to file an accurate signed tip declaration for the employer each pay period.

(c) General characteristics of "tips".

1. Tip means a sum presented by a customer as a gift or gratuity in recognition of some service performed for them. It is to be distinguished from payment of a charge, if any, made for the service. Whether a tip is to be given, and its amount, are matters determined solely by the customer, and generally they have the right to determine who shall be the recipient of their gratuity. In the absence of an agreement to the contrary between the recipient and a third party, a tip becomes the property of the person in recognition of whose service it is presented by the customer. Only tips actually received by an employee as money belonging to them which they may use as they choose free of any control by the employer, may be counted in determining whether they are a "tipped employee."

2. In addition to cash sums presented by customers which an employee keeps as their own, tips received by an employee include, amounts paid by bank check or other negotiable instrument payable at par and amounts transferred by the employer to the employee pursuant to directions from credit customers who designate amounts to be added to their bills as tips. Special gifts in forms other than money or its equivalent as above described, such as theater tickets, passes, or merchandise, are not counted as tips received by the employee.

(d) Tip pooling. Where employees practice tip splitting, as where waiters or waitresses give a portion of their tips to the bus persons, both the amounts retained by the waiters or waitresses and those given the bus persons are considered tips of the individuals who retain them.

(e) Service charge.

1. A compulsory charge for service, such as 15% of the amount of the bill, imposed on a customer by an employer's establishment, is not a tip unless distributed by the employer to their employees.

2. Similarly, where negotiations between a hotel or restaurant and a customer for banquet facilities include amounts for distribution to employees of the hotel or restaurant, the amounts must be so distributed to the employees at the end of the pay period in which it is earned.

3. If the employer in their payroll records can establish a breakdown of the service charge, such as how much is for tips, room charge, decorations, and other chargeable services, only the amount for tips must be paid to the employee at the end of the pay period in which it is earned.

4. Similarly, where an accounting is made to an employer for their information only or in furtherance of a pooling arrangement whereby the employer redistributes the tips to the employees upon some basis to which they have mutually agreed among themselves, the amounts received and retained by each individual as their own are counted as their tips.

(f) Receiving the minimum amount "customarily and regularly". The employee must receive tips "customarily and regularly" in the occupation in which they are engaged in order to qualify as a tipped employee. If it is known that they always receive more than the stipulated amount each month, as may be the case with many employees in occupations such as those of waiters, waitresses, bellhops, taxicab drivers, barbers, or beauty operators, the employee will qualify and the tip credit provisions of s. DWD 272.03 may be applied. On the other hand, an employee who only occasionally or sporadically receives tips such as at Christmas or New Years when customers may be more generous than usual, will not be deemed a tipped employee. The phrase "customarily and regularly" signifies a frequency which must be greater than occasional, but which may be less than constant. If an employee is in an occupation in which they normally and recurrently receive tips, they will be considered a tipped employee even though occasionally, because of sickness, vacation, seasonal fluctuations or the like, they fail to receive tips in a particular month.

(g) The tip wage credit.

1. In determining compliance with the wage payment requirements the amount paid to a tipped employee as allowable under par. (a)by an employer is deemed to be increased on account of tips to equal the minimum wage applicable under sub. (1) to such employee in the pay period for which the wage payment is made. This credit is in addition to any credit for board, lodging, or other facilities which may be allowable under s. DWD 272.03. The credit allowed on account of tips may be less than the difference between the applicable minimum wage and the rate for a tipped employee; it cannot be more.

2. It is presumed that in the application of this special provision the employee will be receiving at least the maximum tip credit in actual tips: "If the employee is receiving less than the amount credited, the employer is required to pay the balance so that the employee receives at least the minimum wage with the defined combination of wages and tips."

3. Under employment agreements requiring tips to be turned over or credited to the employer to be treated by them as part of their gross receipts, it is clear that the employer must pay the employee the full minimum hourly wage, since for all practical purposes the employee is not receiving tip income.

(h) Overtime payments. When overtime is worked by a tipped employee who is subject to the overtime pay of ch. DWD 274, their regular rate of pay is determined by dividing their total remuneration for employment in any workweek by the total number of hours actually worked by them in that workweek for which such compensation was paid. A tipped employee's regular rate of pay includes the amount of tip credit taken by the employer, and the cash wages including commissions and certain bonuses paid by the employer. Any tips received by the employee in excess of the tip credit need not be included in the regular rate. Such tips are not payments made by the employer to the employee as remuneration for employment within the meaning of ch. DWD 274.

(3) ALLOWANCE FOR BOARD AND LODGING. This subsection is effective on July 24, 2009. Where board or lodging or both are furnished by the employer in accordance with s. DWD 272.04, and accepted and received by a particular employee, an allowance may be made not to exceed the following amounts:

(a) Lodging.

1. All employees except opportunity and minor employees $58.00 per week or $8.30 per day.

2. Minor employees $58.00 per week or $8.30 per day.

3. Opportunity employees $47.20 per week or $6.75 per day.

(b) Meals.

1. All employees except opportunity and minor employees $87.00 per week or $4.15 per meal.

2. Minor employees $87.00 per week or $4.15 per meal.

3. Opportunity employees $70.80 per week or $3.35 per meal.

(3m) ALLOWANCE FOR BOARD AND LODGING. This subsection is in effect from June 1, 2006, to July 23, 2009. Where board or lodging or both are furnished by the employer in accordance with s. DWD 272.04, and accepted and received by a particular employee, an allowance may be made not to exceed the following amounts:

(a) Lodging.

1. All employees except opportunity and minor employees $52.00 per week or $7.40 per day.

2. Opportunity and minor employees $47.20 per week or $6.75 per day.

(b) Meals.

1. All employees except opportunity and minor employees $78.00 per week or $3.70 per meal.

2. Opportunity and minor employees $70.80 per week or $3.35 per meal.

(4) BOARD AND LODGING, VALUE. Where board, lodging or other necessities of life, are furnished by the employer, in accordance with s. DWD 272.04, and accepted and received by the employee or their spouse or both, minor children or other dependents, an allowance may be made, not to exceed the "fair value" of such necessities on the basis of average cost to the employer, or to groups of employers similarly situated, or average values to groups of employees or other appropriate measures of fair value.

(5) PAYMENT OF WAGES ON OTHER THAN TIME BASIS. Where payment of wages is made upon a basis or system other than time rate, the actual wage paid per payroll period shall not be less than provided for in this order.

(6) HOMEWORK. Wages paid to homeworkers shall be not less than the rates prescribed in this order.

(7) DETERMINATION OF COMPLIANCE. The payroll period shall be taken as the unit of determining compliance with the minimum rates prescribed in this order.

(8) PROOF OF PREVIOUS EMPLOYMENT. An employee is responsible for providing the proof of previous employment necessary to determine whether the person is a probationary employee. An employer shall not be liable for a violation of this section if the violation is caused by the employer's good faith reliance of the proof presented by an employee under this subsection.

Notes

Wis. Admin. Code Department of Workforce Development DWD 272.03

Cr. Register, July, 1978, No. 271, eff. 8-1-78; am. (1) and (2) (a), Register, August, 1987, No. 380, eff. 9-1-87; am. (1), (2) (a) and (3), Register, June, 1989, No. 402, eff. 7-1-89; am. (1), (2) (intro.) and (3) cr. (8), Register, March, 1990, No. 411, eff. 4-1-90; am. (1), (2) (a) and (3), Register, February, 1992, No. 434, eff. 3-1-92; corrections made under s. 13.93(2m) (b) 7, Stats., Register, February, 1996, No. 482; r. and recr. (1), (2) (a) and (3), cr. (1m) and (3m), Register, May, 1997, No. 497, eff. 6-1-97; emerg. cr. (1) (b), (1m) (b), (2) (b), am. (3) and (3m), eff. 5-31-97; cr. (1) (b), (1m) (b), (2) (am), am. (3), (3m), Register, September, 1997, No. 501, eff. 10-1-97; emerg. am. (1) and (3), r. (1m) and (3m) eff. 6-1-05; CR 05-056: am. (1), (1m), (3) and (3m) Register August 2005 No. 596, eff. 11-1-05; CR 08-069: r. and recr. (1) and (3), am. (1m) (intro.) and (3m) (intro.) Register February 2009 No. 638, eff. 3-1-09.