Section R20-5-1207. Tip Credit Toward Minimum Wage

A.      In this Section, unless the context otherwise requires, “custom- arily and regularly” means receiving tips on a consistent and recurrent basis, the frequency of which may be greater than occasional, but less than constant, and includes the occupa- tions of waiter, waitress, bellhop, busboy, car wash attendant, hairdresser, barber, valet, and service bartender.

B.       For purposes of calculating the permissible credit for tips under A.R.S. § 23-363(C), the following applies:

1.        Tips are customarily and regularly received in the occu- pation in which the employee is engaged;

2.        Except as provided in R20-5-1206(E), the employee actu- ally receives the tip free of employer control as to how the employee uses the tip and the tip becomes the employee’s property;

3.        Employees who customarily and regularly receive tips may pool, share, or split tips between them, and the amount each employee actually retains is considered the tip of the employee who retains it;

4.        Employer-required sharing of tips with employees who do not customarily and regularly receive tips in the occu- pation in which the employee is engaged, including man- agement or food preparers, are not credited toward that employee’s minimum wage; and

5.        A compulsory charge for service imposed on a customer by an employer’s establishment are not credited toward an employee’s minimum wage unless the employer actu- ally distributes the charge to the employee in the pay period in which the charge is earned.

C.      Upon hiring or assigning an individual to a position that cus- tomarily and regularly receives tips, an employer intending to exercise a tip credit shall provide written notice to the employee prior to exercising the tip credit. Thereafter, the employer shall notify the employee in writing each pay period of the amount per hour that the employer takes as a tip credit.

Historical Note

New Section made by emergency rulemaking at 13

A.A.R. 473, effective January 25, 2007 for 180 days (Supp. 07-1). Emergency renewed at 13 A.A.R. 2785, effective July 17, 2007 for 180 days (Supp. 07-3). New Section made by final rulemaking at 13 A.A.R. 4315,

effective January 13, 2008 (Supp. 07-4).