"Tipped employee" is a specific legal classification under the Fair Labor Standards Act, 29 U.S.C. § 203(t). The federal definition: any employee engaged in an occupation in which they customarily and regularly receive more than $30/month in tips.
What "customarily and regularly" means:
- The employee receives tips frequently, not on isolated rare occasions
- The tips are characteristic of the role (servers, bartenders, valets — yes; line cooks, dishwashers — no)
Why the classification matters: only tipped employees are eligible for the tip credit. An employer paying a non-tipped employee $2.13/hr would be in violation of the FLSA regardless of how the worker's tips averaged out.
State definitions can be narrower or broader. New York, for instance, defines tipped occupations by industry (food service, hospitality) and has stricter monthly tip thresholds. California rejects the federal tip credit framework entirely, so the classification has less practical effect there.
Common tipped occupations (federal): waitstaff, bartenders, baristas, valets, casino dealers (in some states), hair stylists, barbers, manicurists, hotel housekeeping (in some jurisdictions), bellhops, food delivery drivers (W-2, not 1099 — gig drivers are independent contractors and not "employees" at all).