Tips cannot be used as wages, GDOL warns

Tips received by service staff cannot be used as wages, the Department of Labor warned.

Some businesses may be supplementing the minimum wage of their service staff with tips or service charges. But according to the US Department of Labor, and other wage and hour experts, tips received by service staff cannot be used as wages. Service charges also cannot be directly used to supplement minimum wage.

Guam Department of Labor director David Dell’Isola said the inconsistency in the method service industry staff are paid was brought to his attention by business owners. Dell’Isola said everyone in the service industry on this island is to be paid at least $8.25 an hour, Guam’s current minimum wage, for hours worked during each pay period. There are no exceptions and no substitutes for that — wait staff and bartenders included.