Important Pay Definitions

Tip Pool

With the exception of your contribution to the tip pool (which is limited to employees who customarily and regularly receive tips), employees retain all of their tip earnings.

Base Rate

The pay rate the company quoted to you is the base rate. If you get a raise, the new rate quoted to you  is the new base rate.

Cash Wage

The base rate is also known as the cash wage.

Tip Credit

If your cash wage is below minimum wage, management will as permitted by law, use a tip credit to satisfy the minimum wage. The difference between the cash wage and minimum wage is the tip credit. The tip credit will never exceed your actual tip earnings.

Regular Rate

As described above for tipped employees, the cash wage plus tip credit is defined as the regular rate.

Overtime Rate

The overtime rate is 1.5 times the regular rate. If you work more than 40 hours in a week, the hours worked over 40 are paid at the overtime rate.

Blended Rate

In a week that you performed work at two or more different base rates, and you worked overtime hours as well, per the federal "Fair Labor Standards Act", we must average the two or more base rates into one, blended rate. The blended rate becomes the new regular rate. We pay the regular hours at the blended rate and the overtime hours at 1.5 x the blended rate. Be assured, it does not negatively effect your pay in anyway.


30 hours at $7.00 base rate = $210.00 + 20 hours at $8.00 base rate = $160.00 = total regular pay of $370.00 divided by 50 total hours = $7.40 blended rate. The overtime rate is 1.5 x the blended rate.

This is explained in Department of Labor Fact Sheet #23 below. If you like, you can read the complete fact sheet by clicking here.

Dept of Labor Fact Sheet #23