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Do Waitress Tips Count for Unemployment?

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Unemployment benefits vary depending on the state you live in and the amount of your previous wages before filing your claim. In many states, waitress receive a reduced minimum wage from employers in exchange for receiving tips directly from customers. Each state is different, but these tips generally count toward unemployment eligibility or compensation.

Tip

The U.S. Department of Labor added new guidelines around unemployment in light of COVID-19, and many states have laid off or furloughed their waitstaff as restaurants have closed in-person service. You may be able to qualify for unemployment if you are furloughed, self-employed, work part time, your hours have been reduced, or you meet other requirements. Always check with your state's unemployment insurance program for state-specific guidelines. Check your state's unemployment benefits.

Financial Eligibility

Before you can receive unemployment benefits you must meet the financial eligibility requirement for your state. This is a minimum amount of insured wages you must have earned in the 15 to 18 months before you filed your claim. Insured wages are those your employer paid taxes into the unemployment insurance trust fund based on.

Compensation Calculation

If you managed to meet your state’s insured wage eligibility requirement from other employment, the next step is the compensation calculation. The state determines how much to pay you each week based on your insured wages during the same 15- to 18-month period. Depending on the state you live in, waitressing tips may count toward this calculation.

Partial Benefits

On the other hand, the tips you receive from a waitressing job can affect your payments if you’re already on unemployment. It’s your duty to report all wages earned to the state for each week you receive benefits. If the wages you earn don’t exceed your weekly benefit amount, it’s possible to still receive benefits. However, your payments will be reduced based on all income, including any tips you received. If your wages exceed your weekly benefit amount, you don’t qualify for benefits at all.

Considerations

The effect of tips on unemployment eligibility and compensation varies from state to state. Contact your state’s labor office if you need state specific law information or specific information about your individual claim. Always defer to the information provided by your state’s labor office because it’s the most up-to-date and accurate information available.

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About the Author

Michaele Curtis began writing professionally in 2001. As a freelance writer for the Centers for Disease Control, Nationwide Insurance and AT&T Interactive, her work has appeared in "Insurance Today," "Mobiles and PDAs" and "Curve Magazine." Curtis holds a Bachelor of Arts in communication from Louisiana State University.