The following opinion is presented on-line for informational use only and does not replace the official version. (Mich Dept of Attorney General Web Site - www.ag.state.mi.us) STATE OF MICHIGAN FRANK J. KELLEY, ATTORNEY GENERAL Opinion No. 5316 June 15, 1978 COMPENSATION AND SALARIES: Minimum wages for employees who receive tips LABOR AND EMPLOYMENT: Minimum wages for employees who receive tips MINIMUM WAGE LAW: Employees who receive tips Employees who receive tips must be paid in accordance with the state, rather than the federal, minimum wage law if the state law yields a higher minimum wage; if the federal minimum wage is higher, such employees are entitled to receive the federal minimum wage. Honorable Bill S. Huffman State Senator The Capitol Lansing, MI 48909 You have asked for my opinion as to whether employees who receive tips must be paid the minimum wage required by the federal Fair Labor Standards Act, 29 USC 201 et seq, or that required by the Michigan Minimum Wage Law of 1964, 1964 PA 154, as amended, MCLA 408.381 et seq; MSA 17.255(1) et seq. Under 29 USC 206 as last amended by PL 95-151, the minimum wage is $2.65 per hour for 1978 and the employer is entitled to deduct 50% of the minimum wage rate for tips. Pursuant to the provisions of 1964 PA 154, Sec. 4 as last amended by 1977 PA 288, the Michigan minimum hourly rate is also $2.65 effective January 1, 1978, but any deduction for tips may not exceed 25% of that rate as provided in 1964 PA 154, Sec. 7, supra. The answer to your question rests in section 18(a) of the Fair Labor Standards Act, 29 USC 218(a), and in section 14 of the Michigan Minimum Wage Law of 1964, MCLA 408.394; MSA 17.255(14). To the extent pertinent, section 14 of the state law provides: 'The provisions of this act shall not apply to any employer who is subject to the minimum wage provisions of the federal fair labor standards act of 1938 as amended, except in any case where the application of such minimum wage provisions would result in a lower minimum wage than provided in this act ' 29 USC 218(a) of the Fair Labor Standards Act, a correlative provision, in pertinent part, states: 'No provision of this chapter or of any order thereunder shall excuse noncompliance with any Federal or State law or municipal ordinance establishing a minimum wage higher than the minimum wage established under this chapter ' It is thus seen from the foregoing statutory quotations that the federal minimum wage law permits the state law to be effective where the minimum wage payable under the state law would be higher than that provided by the federal law, and the state law, in turn, provides that the minimum wage payable under its terms shall be applicable where it results in a higher minimum wage than the federal wage law. The federal law, therefore, by its explicit terms, permits the state minimum wage law to be effective where it yields a higher minimum hourly wage. The answer to your question, therefore, is that the employees who receive tips must be paid in accordance with the state minimum wage law if it yields a higher minimum wage rate than the federal minimum wage law; if the federal minimum wage is higher, then such employees are entitled to receive the federal minimum wage. Frank J. Kelley Attorney General