After adding an employee's tips for the week to their regular pay, the average hourly rate must be at least what amount?

The correct answer is based on the federal minimum wage requirement as defined by the Fair Labor Standards Act (FLSA). The federal minimum wage is set at $7.25 per hour, which is the minimum amount that an employee must earn for each hour of work.

When adding tips to an employee's regular wages, it is crucial to ensure that the total compensation meets or exceeds this federal minimum wage threshold. This means that the employee's average hourly rate, when factoring in both their regular pay and the tips they receive, must be at least $7.25 to comply with legal wage standards.

In scenarios involving tipped employees, the employer can take a tip credit, assuming certain conditions are met. However, even with the tip credit, the total earnings including tips must reach at least the minimum wage level.

Understanding this requirement is vital for payroll compliance and to avoid legal ramifications associated with wage violations.