Under the Fair Labor Standards Act (FLSA), tipped employees must be paid $2.13 per hour. New Mexico and Texas have the same minimum wage for tipped employees.

However, cities like Albuquerque, Santa Fe, and Las Cruces have their own minimum wage for tipped employees. In Las Cruces, it is $3.68 (40% of the city's regular minimum wage), Albuquerque has $5.35 (60% of city's regular minimum wage), and Santa Fe has $3.68 (30% of city's regular minimum wage).

New Mexico law states if you customarily and regularly receive more than thirty dollars ($30.00) a month in tips, you are considered a tipped employee.

Q: Can an employer consider tips as part of my wages?

A: Yes. An employer may consider tips as part of wages, but the tips combined with the employer's cash wage shall not equal less than the minimum wage rate.

Q: Can an employer keep all my tips?

A: No. All tips received by tipped employees (see definition above), shall be retained by that employee, however New Mexico law does not prohibit the pooling of tips among employees. The FLSA prohibits employers and their agents from taking tips from employees serving customers. All tips left by customers belong exclusively to an employee who earned them. Restaurant owners, managers, supervisors or their assistants are not allowed to collect or receive tips.

An employer can use a “tip credit” to bring an employee up to what is the federally required minimum wage of $7.25 an hour, however if waitstaff are paid minimum wage already, employers cannot withhold tips from them.



Do Waiters and Waitresses Get Paid Overtime?

Many servers, including waiters and waitresses, must arrive early to work to dress in their uniform and learn the day’s menu so that they can discuss the specials with customers. After their shift, many servers must stay later to change clothes before going home, or do side work like put silverwear in napkins.  Overtime pay is required for many of these work requirements, but is often not paid. 

Under the FLSA, restaurant servers can be entitled to earn compensation for every hour worked.  The FLSA requires that waiters and waitresses are paid at least $7.25 per hour.  This can be straight pay or a combination of a lower wage and tips. 

Can restaurant employers deduct from my pay if the register is short, or if customers walk out?

Deductions made from wages for items such as cash shortages, required uniforms, or customer service walk-outs are illegal if the deduction reduces the employee’s wages below the minimum wage or cuts into overtime pay.

Then why am I not being paid overtime?

Unfortunately, it’s not uncommon for restaurants, hotels, caterers and country clubs to withhold overtime pay due waitstaff, bartenders, bellhops and other hospitality industry workers. Under the federal Fair Labor Standards Act (FLSA), “overtime” typically involves working more than 40 hours a week.

Are there any differences between New Mexico and the Federal overtime pay regulations?

If you are a non-exempt employee, your employer must pay your 1 and a half times your regular hourly rate for all hours you work over 40 hours in a seven-day week. New Mexico law calculates overtime on a weekly basis.

For example, if you work 12 hours in one workday, you cannot get overtime pay unless you work more than 40 hours in that same week. New Mexico law prohibits employers from requiring an employee to work more than 16 hours in a day, except in emergency situations.

How do restaurant employers abuse "side work"?

An employer might ask you to clean up after your shift ends at the country club or wait “a few more tables” until evening rush is over. However, if you work over 40 hours at the end of the week, you are owed time and half your regular rate for any extra hours you worked. This means if your regular rate is $10 an hour, your employer must pay you $15 for each hour you work beyond your regularly scheduled 40-hour work week: $10 + $5 ($5 is half of your hourly wage) = $15.

So, if you work 40 hours a week, your normal paycheck before taxes and other deductions should be $400. If you work an additional 10 hours of overtime, your overtime pay will be equal to 10 hours x $15, or $150. As such, your weekly paycheck should total $550.

What if my employer required me to clock out before I start my side work?

An employer still must pay you for the hours you work doing side work regardless if you clock out or not. Overtime also applies. If you are not being paid for this time, contact our office.

Can a restaurant employer pay me less than the Federal minimum wage?

Yes. A restaurant employer may pay waiters and bartenders less than $7.25 an hour if he or she believes tips from customers make up for the federal minimum wage. Here, the employer must use a portion of the tips collected to ensure waitstaff receive at least $7.25 an hour. However, if an employer intends to use a tip credit system, he or she must first notify the employee.

*The above is not legal advice and it is recommended you consult an attorney.

Licensed in New Mexico and the Federal Courts.







Read Patricia's Smith article in the New York Daily News (Dec. 2018):

"It’s Finally Time for One Fair Wage: Servers Shouldn’t Be at the Mercy of Customers, Among Other Factors"