Virginia Tipped Minimum Wage: $2.13 Rate, Tip Pools, and Overtime

Virginia’s tipped minimum wage lets employers pay a direct cash wage of $2.13 per hour and count tips toward the state’s full minimum of $12.77 per hour.¹² The difference, up to $10.64 per hour, is the tip credit. If tips plus the $2.13 cash wage don’t reach $12.77 in a given workweek, the employer has to pay the difference. That is the rule that governs everything else, and the rest of the details exist to keep employers from finding ways around it.

Who Counts as a Tipped Employee

Virginia treats you as a tipped employee if you regularly receive more than $30 per month in tips from customers.³ Servers, bartenders, and delivery workers almost always meet that threshold. Occasional tips at a job that isn’t tip-based don’t. If a position doesn’t consistently generate $30 a month in gratuities, the employer must pay the full $12.77 with no tip credit at all.

Virginia adds a protection the federal definition doesn’t: an employer can’t classify you as a tipped employee if any federal or state law prohibits you from soliciting tips.³ Separately, the Virginia Minimum Wage Act excludes certain workers from its coverage altogether, including farm laborers, some student workers, and employees of nonprofits where no real employment relationship exists.⁴

What Your Employer Must Do Before Paying $2.13

The tip credit isn’t automatic. Federal regulations require the employer to tell you, before applying it, four specific things:⁵

the cash wage the employer will pay per hour
the tip credit amount the employer is claiming
that you keep all your tips except amounts shared through a valid tip pool
that the tip credit doesn’t apply unless you’ve been informed of these requirements

Notice can be oral or written, but written notice creates a record.⁶ Skipping the notice invalidates the tip credit entirely, even for a worker earning well above minimum wage in tips. In that case, the employer owes the full $12.77 for every hour worked.

Employers must also keep records of each worker’s reported tips for every pay period. Without those records, an employer will struggle to defend the tip credit in a wage dispute.

The $12.77 Floor and Weekly Make-Up Pay

Your total pay can never fall below $12.77 per hour. If tips plus the $2.13 cash wage don’t get you there, the employer has to make up the difference.² It isn’t optional, and it isn’t a favor.

The math happens on a workweek basis, not shift by shift. A busy Friday can offset a slow Tuesday lunch, which sometimes hides the fact that individual shifts came in under the floor. But if the weekly total doesn’t reach $12.77 per hour, the employer covers the gap. This matters most during slow seasons and weekday shifts, when tips get unpredictable. If you suspect you aren’t receiving make-up pay when you should, keep your own tip records. They become critical evidence if the employer’s records are incomplete.

Tip Pools: Who Can and Can’t Be In One

Tip pooling is legal in Virginia, but who can be in the pool depends on whether the employer takes a tip credit.

When the employer pays $2.13 and claims the tip credit, only workers who customarily and regularly receive tips can be in the pool: servers, bartenders, bussers, and similar front-of-house staff. Cooks, dishwashers, and other back-of-house workers cannot participate.⁶

If the employer pays the full $12.77 to everyone and takes no tip credit, back-of-house staff can join the pool.⁶

One rule applies in both cases: employers, managers, and supervisors cannot receive money from a tip pool or keep any portion of employee tips for any reason.⁷ Putting ineligible people in the pool can void the tip credit for the affected workers, and the employer then owes the full minimum wage retroactively.

Service Charges Are Not Tips

An automatic gratuity on a large party’s check, a banquet fee, or a bottle service charge is not a tip under the law. It is a service charge that belongs to the employer, who can distribute all, some, or none of it to staff.⁸

The IRS looks at four factors to decide: the customer paid it voluntarily, chose the amount without restriction, wasn’t told what to pay by employer policy, and could decide who received it.⁸ If any of those is missing, it’s a service charge. That distinction hits your paycheck directly, because service charges don’t count toward the tip credit. When your restaurant adds an 18% auto-gratuity to tables of six, that money doesn’t help you reach the $12.77 floor. Your voluntary tips and the $2.13 cash wage have to get there without it.

Overtime for Tipped Workers

After 40 hours in a workweek, you’re entitled to overtime. The employer can still claim the tip credit during overtime hours, but the credit amount doesn’t grow by half.⁹

The formula is the full minimum wage times 1.5, minus the tip credit. In Virginia in 2026, that comes to $12.77 × 1.5 = $19.16, minus the $10.64 tip credit, leaving roughly $8.52 in direct cash wages for each overtime hour. Tips still need to bring the total to $19.16 per overtime hour. If they don’t, the employer covers the shortfall, just as with regular hours.

Side Work and the Dual Jobs Rule

A lot of tipped work isn’t strictly tipped. Servers roll silverware, clean tables, brew coffee, and prep between customers. A federal rule that took effect in December 2024 clarified when the $2.13 cash wage applies to that kind of time.¹⁰

Duties related to the tipped occupation count as part of that occupation. A server cleaning her section, rolling silverware, or making coffee between tables is doing tipped work, and the tip credit applies to all of that time. What the tip credit does not cover is a genuinely separate non-tipped job at the same workplace. If the same server also works maintenance shifts, those hours have to be paid at the full $12.77.¹⁰

Rate Increases Coming in 2027 and 2028

Virginia adjusts its minimum wage annually based on the Consumer Price Index, and recently signed legislation locks in specific future floors:¹¹¹²

January 1, 2027: $13.75 per hour
January 1, 2028: $15.00 per hour

The $2.13 cash wage stays where it is, so each increase widens the tip credit. When the state minimum reaches $15.00, the maximum tip credit will be $12.87. Employers will be leaning on tips to bridge a bigger gap, which makes the weekly make-up guarantee even more important on slow shifts.

Penalties for Underpayment

Wage violations in Virginia carry real consequences that scale with the amount involved and the employer’s intent:¹³

liquidated damages equal to the unpaid wages, effectively doubling what the employer owes, plus 8% annual interest from the date wages were due
civil penalties of up to $1,000 per violation, assessed by the Commissioner of Labor and Industry
misdemeanor charges when unpaid wages total less than $10,000 and the employer acted willfully with intent to defraud
felony charges when unpaid wages reach $10,000 or more, or when the employer has prior wage theft convictions

Workers can sue individually or join with other affected employees in a collective action. Courts can award attorney’s fees when the employer knowingly violated the law, which is often what makes a small wage claim worth pursuing.¹³

How to File a Wage Complaint

If your employer is shorting your pay, whether by failing to make up the difference to $12.77, skimming from a tip pool, or applying a tip credit without giving you notice, you can file a complaint with the Virginia Department of Labor and Industry’s Payment of Wage Unit.¹⁴ The online portal on the DOLI website is the fastest route.

Before filing, pull together pay stubs, your own tip logs, work schedules, and any written communication about your pay arrangement. Your records matter especially when your employer didn’t keep the tip reports the law requires. Virginia’s anti-retaliation provisions protect workers who file wage complaints, and the Commissioner can order reinstatement and lost wages if an employer retaliates.

1
U.S. Department of Labor. Minimum Wages for Tipped Employees
2
Virginia Department of Labor and Industry. Virginia Minimum Wage Rate Increasing Effective January 1, 2026
3
Virginia Code Commission. Virginia Code 40.1-28.9 – Definitions; Determining Wage of Tipped Employee
4
Virginia Code Commission. Virginia Code Article 1.1 – Virginia Minimum Wage Act
5
eCFR. 29 CFR 531.59 – Requirements for Employers Utilizing the Tip Credit
6
U.S. Department of Labor. Fact Sheet 15 – Tipped Employees Under the Fair Labor Standards Act
7
U.S. Department of Labor. Tip Regulations Under the Fair Labor Standards Act
8
Internal Revenue Service. Tips Versus Service Charges – How to Report
9
U.S. Department of Labor. FLSA Overtime Calculator Advisor
10
Federal Register. Tip Regulations Under the Fair Labor Standards Act – Restoration of Regulatory Language
11
Virginia Code Commission. Virginia Code 40.1-28.10 – Minimum Wages
12
Governor of Virginia. Governor Spanberger Signs Bills Into Law to Raise State Minimum Wage, Boost Workforce Training, and Support Economic Growth
13
Virginia Code Commission. Virginia Code Article 2 – Pay; Assignment of Wages
14
Virginia Department of Labor and Industry. Payment of Wage