Guides

New Jersey restaurant pay rules (2026): what to pay tipped and non-tipped staff

Mays TeamOctober 7, 2026
The Time Off report in Mays for the week of September 28, 2026: approved sick time for a server and a line cook, with start and end dates and hours

New Jersey fixes the tip credit rather than the tipped wage. An employer can count up to $9.87 an hour of tips toward the minimum wage, and the cash wage is what's left: $6.05 an hour against the $15.92 minimum wage in 2026 (NJ wage and hour laws). So when the minimum wage goes up each January, the tipped wage goes up by the same amount. Around that, New Jersey is stricter than federal law: pooled tips can't go to non-tipped staff, card fees can never come out of tips, and too much side work costs the tip credit for all of it (NJDOL, tipped workers).

This page puts New Jersey's figures in one place. It covers what you owe tipped staff like servers and bartenders, what you owe everyone else, and two example weeks with the math shown. Every figure links to the official page it comes from.

This is general information, not legal advice. Whether a rule applies can depend on your business's size and your own facts; the note at the end says more.

New Jersey pay rules at a glance

As of October 7, 2026:

Rule

New Jersey

Minimum wage

$15.92 an hour, since January 1, 2026

Tipped employees: minimum cash wage

$6.05 an hour, if you take the tip credit

Maximum tip credit

$9.87 an hour

Who counts as tipped

Customarily and regularly receives more than $30 a month in tips

Overtime

1.5× the regular rate after 40 hours in a workweek; no daily overtime

Meal and rest breaks for adults

Not required by New Jersey or federal law

Next change

$16.48 minimum wage and $6.61 tipped cash wage from January 1, 2027

Sources: NJDOL, 2026 minimum wage; NJDOL, tipped workers; NJ wage and hour laws; US DOL, state meal periods; US DOL, state rest periods; NJDOL, 2027 minimum wage.

Other New Jersey rates:

  • seasonal employers and small employers (generally fewer than 6 employees): $15.23 an hour
  • farm workers paid hourly or piece-rate: $14.20 an hour
  • long-term care facility direct care staff: $18.92 an hour

A small or seasonal employer that takes a tip credit still works from the $15.92 rate: the cash wage is $6.05, with at most $9.87 in credit (NJ wage and hour laws). "Small" is counted over workweeks, not on one day: generally fewer than 6 employees on every working day in most weeks of this year and in at least 48 weeks of last year (NJ wage and hour laws).

Who counts as a tipped employee in New Jersey

In New Jersey, a tipped employee is someone who customarily and regularly receives more than $30 a month in tips (NJDOL, tipped workers).

In a restaurant that usually means servers, bartenders, bussers and counter staff who serve customers, including baristas who get tips. Cooks and dishwashers usually aren't tipped employees. Only tips the employee actually receives count. If someone works two jobs, say a server who also works prep shifts, the tip credit applies only to the hours in the tipped job (DOL Fact Sheet #15).

Only the tips an employee keeps count toward that $30: what they pass on through a tip pool doesn't (NJDOL, tipped workers).

What you must pay tipped staff in New Jersey

Servers, bartenders, bussers and baristas who get tips can be paid a lower cash wage, with part of their tips counted toward the minimum wage. That's the tip credit, and it comes with conditions:

  • Pay at least $6.05 an hour in cash wages. That's the $15.92 minimum wage minus the most you can credit from tips, $9.87 (NJDOL, 2026 minimum wage).
  • Cash wages plus tips must reach $15.92 for every hour worked, week by week. If tips fall short in a workweek, you pay the difference by the regular payday for that week (DOL Fact Sheet #15).
  • Tell them first. Before you take the tip credit, tell each tipped employee, in writing or out loud: the cash wage you pay, the tip credit you claim, that the credit can't be more than the tips they actually get, that they keep all their tips except through a valid tip pool, and that the credit doesn't apply unless you've told them all this (DOL Fact Sheet #15).
  • Overtime is figured on the full minimum wage. An overtime hour is worth 1.5 × $15.92 = $23.88. After the $9.87 tip credit, you pay at least $14.01 of it in cash wages (DOL Fact Sheet #15).
  • From January 1, 2027, the minimum wage is $16.48 and the tipped cash wage $6.61 (NJDOL, 2027 minimum wage).

You don't have to take the tip credit. If you pay tipped staff the full $15.92 an hour, their tips are all on top, there's nothing to make up at the end of the week. New Jersey still keeps cooks and dishwashers out of a tip pool you require, though (see below).

Too much side work cancels the credit for all of it

When a tipped employee spends more than 20 percent of the workweek on related duties that don't bring in tips, like folding napkins or setting tables, you can't take the tip credit for any of that time: you pay the full minimum wage for it (NJDOL, tipped workers). The side-work example below works one through.

What you must pay non-tipped staff in New Jersey

Cooks, dishwashers, prep cooks, and cashiers or counter staff who don't get tips are paid like any other hourly employee:

  • At least $15.92 an hour for every hour worked, and at least $16.48 from January 1, 2027 (NJDOL, 2027 minimum wage). No tip credit applies.
  • The same goes for a tipped employee's hours in a non-tipped job, like a server's prep shift (DOL Fact Sheet #15).
  • Overtime is at least 1.5 times their regular rate for hours over 40 in a workweek. At $15.92 an hour, that's $23.88 (NJ wage and hour laws).
  • Can they share in the tip pool? No. New Jersey limits a required pool to staff who customarily and regularly receive tips (NJDOL, tipped workers).

Worked examples (made-up numbers)

The names, hours and tips below are made up. The rates are New Jersey's as of October 7, 2026.

A server's week: when you have to top up

Sam is a server paid the $6.05 cash wage. He works 32 hours in each of two weeks: a busy one with $520.00 in tips and a slow one with $210.00.


Busy week

Slow week

Hours worked

32

32

Cash wages (32 × $6.05)

$193.60

$193.60

Tips received

$520.00

$210.00

Cash wages + tips

$713.60

$403.60

Minimum for the week (32 × $15.92)

$509.44

$509.44

You pay on top

$0.00

$105.84

In the slow week, $210.00 in tips covers only part of the $315.84 tip credit (32 × $9.87), so you pay the difference by the regular payday: $509.44 − $403.60 = $105.84. In the busy week you owe nothing extra, and every dollar of tips is still Sam's.

Side work past the 20% line

Sam works 32 hours in a week, and 8 of them go to side work that doesn't bring in tips, like folding napkins and setting tables. New Jersey lets you take the tip credit for that kind of work only while it stays at or under 20% of the week, 6.4 hours here (NJDOL, tipped workers). Sam's 8 hours are over that line, so all 8 must be paid at the full $15.92, not just the hours past it: 8 × ($15.92 − $6.05) = $78.96 more than his cash wage alone would come to.

A cook's week with overtime

Ana is a line cook paid the New Jersey minimum wage, $15.92 an hour. She works five 9-hour days: 45 hours.


Hours

Rate

Pay

Regular hours

40

$15.92

$636.80

Overtime hours (over 40)

5

$23.88 (1.5 × $15.92)

$119.40

Total

45


$756.20

Overtime is counted by the workweek, and hours can't be averaged across two weeks: a long week earns overtime even if the next one is short (US DOL, overtime). Bonuses can change the rate too; see Time clock, breaks and overtime: first-month payroll mistakes to avoid.

Tip pooling rules in New Jersey

New Jersey has its own tip-pool rules (NJDOL, tipped workers): Pooled tips may not go to non-tipped employees. Employers must tell employees of any required tip-pool contribution and may not keep tips for any other purpose, including paying any part, however small, of credit or debit card fees.

Federal rules apply too, and where the two differ, follow the stricter one (US DOL, tips):

  • The business, its managers and supervisors never keep employees' tips. A manager can't take anything from a pool; they may keep only tips for service they directly and solely provide. An owner with a real stake who helps run the business counts as a manager too.
  • With a tip credit, a pool you require can include only staff who customarily and regularly receive tips: servers, bartenders, bussers, counter staff who serve customers.
  • Without a tip credit, federal law would let you include cooks and dishwashers, but New Jersey doesn't: a pool you require stays limited to staff who serve customers.
  • Card fees: federal law lets you reduce a card tip by the card company's actual fee percentage, but New Jersey doesn't allow it.
  • Service charges: under federal law, a mandatory service charge isn't a tip: money you share from one is wages, and it counts in the regular rate for overtime (DOL Fact Sheet #15). New Jersey adds its own rule: A compulsory service charge, such as 15 percent of the bill or an added charge for large parties, is not a tip under New Jersey law, even if the employer passes it on to employees. Neither are staff amounts a hotel builds into a banquet contract (NJDOL, tipped workers).
  • Pay pooled tips out by the regular payday for the week or pay period (DOL Fact Sheet #15).

How to split a pool fairly, with a worked example: Tip pooling for new restaurant owners.

Overtime in New Jersey

New Jersey's overtime law draws the same line as the federal one (NJ wage and hour laws): non-exempt employees get at least 1.5 times their regular rate for hours over 40 in a workweek (US DOL, overtime).

A workweek is any fixed, recurring stretch of seven days that you choose, and hours can't be averaged across two weeks. There's no daily overtime, no double time and no seventh-day premium under New Jersey or federal law, and weekend or holiday hours don't earn a premium by law.

For tipped staff, overtime is figured on the full minimum wage, not the cash wage (see the tipped section above).

Breaks in New Jersey

  • Meal breaks: No specific New Jersey rule found — federal rules apply (US DOL, state meal periods). The FLSA does not require meal periods. A bona fide meal period (typically 30+ minutes) is not work time (US DOL, breaks).
  • Rest breaks: No specific New Jersey rule found — federal rules apply (US DOL, state rest periods). The FLSA does not require breaks. Short breaks an employer offers (about 5 to 20 minutes) are paid work time (US DOL, breaks).
  • Minors: Under 18: a 30-minute meal break after no more than 6 hours in a row; a shorter break doesn't interrupt the 6 hours. Employers must post minors' schedules, including the daily meal period (NJ Child Labor Law).

Other New Jersey rules that affect pay

  • Reporting-time pay: An employee who reports for duty at the employer's request is paid at least 1 hour at the applicable wage rate. This does not apply if the employer has made available the minimum hours of work agreed with the employee before work began that day (NJ wage and hour laws).
  • Paid sick leave: Under the Earned Sick Leave law, employees earn 1 hour of sick leave for every 30 hours worked, or the employer gives 40 hours up front. Employers must provide up to 40 hours per benefit year; up to 40 unused hours carry over, but use can be limited to 40 hours a year. Employers can require seven days' notice for planned leave and can bar planned leave on busy dates they have told employees about (NJDOL, earned sick leave).
  • Food handler training: A certified food protection manager is required, not a card for every employee. Who: one certified food protection manager per Risk Type 3 establishment (NJDOH, Chapter 24 FAQ).

Sick pay and wage claims

  • Sick pay for tipped staff counts their tips. Pay earned sick leave at the employee's normal rate: their total earnings, tips included but overtime premiums left out, over the last 7 workdays they didn't take leave, divided by the hours worked. No tip credit is allowed during sick leave (NJDOL, tipped workers).
  • A statement of wage rights for everyone. Give each employee, and each new hire, a written copy of the Department of Labor's statement of their rights under the state's wage and hour laws (P.L.2019, c.212).
  • Old claims stay open. An unpaid-wage claim can reach back 6 years, and a court can add damages of up to 200% of the unpaid wages (NJ wage and hour laws).

Local rates in New Jersey

We found no New Jersey city or county with its own minimum wage, so the state figures apply across New Jersey.

New Jersey's Earned Sick Leave law also overrides any county or city sick leave ordinance (NJ wage and hour laws).

How Mays helps

Mays runs the schedule, time clock, tip pool and payroll export for each location. For New Jersey pay rules, that means:

  • Positions and wages. Give each position a default hourly wage, for example the tipped cash wage for servers and at least the minimum wage for cooks. Turn on Labor law compliance and Mays looks up each location's minimum wage from its address and warns you when a position's default wage, someone's hourly wage or a punch is below it, comparing tipped positions with the tipped cash wage when it has that figure. It never blocks the save. It switches to the new rate on January 1, 2027 by itself, and admins get a reminder 30 and 7 days before, listing the wages below the new rate.
  • A tip pool per location. Split pooled tips by hours worked, equally or by FTAR score, per pay period or day by day, and choose which positions receive. Until you pick positions under Who receives, the positions marked Tipped share the tips; if no position is marked, everyone who worked does, cooks included. So if you take a tip credit, tick Tipped position only on positions whose staff get tips, or pick them yourself. A punch with no position counts under its shift's position, or else the person's primary or only position at that location; with neither, its hours get no share, and the tip pool card shows how many punches that leaves out. Leave managers and admins out of the pool is on by default, so leave it on. The tips come from your connected POS at that location (Square or Union) or from tips synced with 7shifts time punches, and each person's share appears in the Tip Payouts report and the payroll export. New Jersey doesn't allow taking card processing fees out of tips, so leave Deduct the card processing fee from card tips off: with Labor law compliance on, the card warns you if it's on.
  • The tip-credit make-up is yours to check. Mays doesn't compare a tipped employee's cash wages plus tips with the minimum wage, so check each workweek the way the server example above does.
  • Time clock and timesheets. Staff clock in on their phone, a shared kiosk or an NFC tag. Timesheets run by pay period. Overtime is counted by the workweek, and with Labor law compliance on, by any daily, double-time and seventh-day rule the location's state sets too, which Mays reads from its address; the schedule's labor cost, the reports and the pay summary all include it.
  • Payroll export. A standard CSV or a Gusto-format CSV with regular and overtime hours and pooled tips for each employee. A card surcharge you share with staff goes in as wages, not tips.
  • Reporting-time pay, per location. Turn on Labor law compliance and Mays reads New Jersey's rule from each location's address and records it when a punch is clocked out. Each lands on the pay period's Exceptions tab and in its own column of the pay summary and the payroll export, and the location's settings list the conditions Mays can't check beside the official source.
  • Minors. Turn on Labor law compliance and work rules for minors at a location, and Mays warns you when a shift breaks a minor's hours or time-of-day limits under federal law, and the auto-scheduler won't put a minor on one. It doesn't track minors' breaks yet, so build a minor's meal break into their shifts when you schedule them.
  • Food protection manager certificate. Turn on Labor law compliance and keep your certified manager's certificate in Mays with its expiry date. Each location shows whether someone there holds a valid one, and Mays reminds them and their managers before it expires.
  • Keep non-tipped staff out of the pool, tip credit or not. Under Who receives, pick only tipped positions: New Jersey doesn't let pooled tips go to non-tipped employees.
  • The side-work line is yours to watch. Mays doesn't split a tipped employee's hours into serving and side work, so check each week that side work stays at or under 20%.

Sources

Every figure on this page comes from these official pages, as they read on the date shown.

This page is general information, not legal advice. Laws change, and coverage rules (your business's size, whether federal law covers you) decide which of them apply. Check the pages above, and ask an employment lawyer or accountant about your situation.

Run New Jersey payroll on the right numbers

Set each position's wage, turn on the tip pool with managers left out, and let the time clock count overtime by the workweek. Then payroll is an export, not an evening.

Start your free trial: 30 days, every module, no card needed. Setting up a tip pool? Read Tip pooling for new restaurant owners.