Proper notice
Employer must inform tipped employees of the tip-credit provisions, including the cash wage and the amount of tip credit claimed, before using the credit. Notice must be in writing and retained.
The most rigorous FLSA tip-credit and side-work compliance audit a multi-location operator can buy.
TipArmor delivers a location-by-location compliance audit — every tipped role's task mix, every tip-pool composition, every state-law variant — checked against the current federal dual-jobs standard and applicable state rules before a specialist releases it.
Every element of 29 U.S.C. §203(m) and 29 C.F.R. §531.56Five statutory notice elements, gate-checkedDOL · state wage-hour · circuit split · state ban searchesSpecialist release on every audit5-business-day SLA
Why audits fail
A single misclassified task can forfeit the entire tip credit.
An employer's tip credit is all-or-nothing: fail any condition for any employee — improper notice, invalid tip pool, misapplied side-work rule — and the employer owes full minimum wage retroactively, plus liquidated damages, for the entire affected class. A $21M+ jury verdict against Perry's Restaurants in 2025 proves the risk is real.
Most operators run compliance by hand, from memory, once or twice a year. The regulatory landscape is unusually unstable: the DOL's 2021 '80/20/30' rule was vacated, reinstated as 1967 text, yet sub-regulatory guidance persists and a circuit split remains. Seven states ban the tip credit entirely. That is exactly where compliance gaps hide.
TipArmor exists to close that gap with a single, exhaustive standard applied identically to every location.
$21M+
single-employer jury verdict for an unlawful tip pool
The benchmark
Measured against the letter of the FLSA and every applicable state variant — subsection by subsection.
We do not summarize the law and hope. Every audit is scored against a versioned rule pack tied to the exact text of 29 U.S.C. §203(m), 29 C.F.R. §531.56, and each state's tip-credit and dual-jobs statute. These are the provisions each audit is held to.
Dual-jobs / side-work rule
An employee performing both tipped and non-tipped duties must be classified correctly. The current federal standard (1967 text) and any applicable state 80/20 rule are applied deterministically.
Valid tip pool
Tip pool participants must be employees who customarily and regularly receive tips. No managers or employers may participate. Pool composition is verified against job descriptions and timekeeping data.
Tip credit taken only for tipped hours
The tip credit may be claimed only for hours the employee performs tipped work. Non-tipped hours must be paid at full minimum wage. Task-level time allocation is audited.
State tip-credit availability & rules
Seven states (AK, CA, MN, MT, NV, OR, WA) ban the tip credit entirely. Others have unique cash-wage minimums, notice requirements, and dual-jobs rules (e.g., CT, MD, NY). Each location's state law is applied.
Liquidated damages & liability
Violations result in back wages, an equal amount in liquidated damages, and attorneys' fees. The audit flags any non-compliance that could trigger this liability.
How an audit is built
Intake to specialist release, with deterministic gates the AI cannot overrule.
AI extracts and classifies. Deterministic rules — running as code, outside the model — decide what is complete. A human specialist signs every release. That order is never reversed.
01
Compliance Gap Scan
Upload POS sales data, timekeeping punches, job-task descriptions, and tip-pool policies for a location. We return a free compliance read: which elements are compliant, which are missing, and which are ambiguous.
02
Data ingestion & classification
As your authorized clerical agent, we ingest structured data and classify every tipped role's task mix against the current federal dual-jobs standard and applicable state variant.
03
Grounded drafting
The audit report is drafted from your validated data and the rule pack into field-locked templates — no legal opinions, no invented facts.
04
Deterministic compliance gates
Task-time allocations reconcile to timekeeping; tip-pool composition is verified against job descriptions; state-law variants are applied; any failure blocks release.
05
Specialist release
A wage-hour compliance analyst reviews the exception queue and signs the release. High-exposure or multi-state audits route to attorney review first.
06
Delivery
You receive the audit: location-by-location report, remediation policy packet, evidence log, and (if purchased) an attorney-certified compliance opinion — ready for your legal team to act on.
The bar we hold
Rigor you can measure.
100%
Specialist-released
No audit ships without a human signature.
5 days
Standard SLA
From complete intake to released audit.
<1%
Critical-defect target
Tracked against a gold-standard audit library.
50+
Jurisdictional rule variants
Federal, 7 no-tip-credit states, and state-specific 80/20 rules, every applicable file.
Why TipArmor
Built to be the most thorough option a multi-location operator has.
Documentation-complete, by design
The deliverable is completeness itself — every statutory element and classification accounted for or explicitly exception-coded. Nothing is left implicit.
Deterministic, not vibes
The gates that decide compliance are code, not a model's opinion. A classification error cannot slip past a statutory requirement.
In its lane, on purpose
We prepare documentation and run audits as your clerical agent. We never give legal advice, contact employees, or represent you in any legal matter.
Engagement
Flat fee, per location per audit. No hourly billing, ever.
Simple, predictable, and aligned with a compliance standard — not a cut of any recovery.
- A free Compliance Gap Scan before you commit — see exactly what is missing.
- One flat fee per location per audit; disclosed pass-through costs for multi-state rule packs.
- Optional fixed-fee attorney review for high-exposure or multi-state audits.
- Optional monthly monitoring retainer for ongoing task-mix and rule-change tracking.
FAQ
Questions, answered precisely.
Is TipArmor a law firm?
No. TipArmor, a service of Your Deputy, Obuke LLC, provides documentation-completeness and compliance-audit services. It is not a law firm, does not provide legal advice, and does not represent you in any legal matter. Attorney review is available and recommended for high-exposure or multi-state audits.
Do you contact employees or conduct the audit on-site?
Never. TipArmor is not a wage-hour investigator and does not contact employees or conduct on-site audits. The operator remains responsible for implementing any remediation.
What makes an audit 'complete'?
Completeness is defined by the FLSA and applicable state law: proper notice verified, dual-jobs classification correct, tip pool valid, tip credit taken only for tipped hours, and state-law variant applied. Deterministic gates enforce each one before release.
How fast is it?
The standard SLA is five business days from complete intake to a specialist-released audit. The free Gap Scan is returned much sooner and tells you exactly what is still needed.
How are you priced?
A flat fee per location per audit, plus disclosed pass-through costs for multi-state rule packs. No hourly billing and no percentage of any recovered amount or sale proceeds.
See what's missing before it costs you a verdict.
Start with a free Compliance Gap Scan. Send your POS, timekeeping, and job-description data for a location and we'll return a compliance read against every subsection of the FLSA and applicable state law.
Documentation-completeness service · not legal advice · the operator implements all remediation.