Section 3(m) of the FLSA permits an employer to take a tip credit towards its minimum wage obligation for tipped employees equal to the difference between the required cash wage (which must be at least $2.13 per hour under federal law) and the federal minimum wage. Some states have laws that require employers to pay more than the federal minimum cash wage of $2.13 per hour. For example, the minimum cash wage for tipped employees in Illinois is $4.95. The minimum cash wage in Michigan is $2.65. The minimum wage in Ohio is $3.85. The minimum wage in Indiana and Kentucky is $7.25.