The issue of tipping has been a complicated topic for many years. In some cases, it’s seen as a way to reward good service; in others, it’s seen as an unfair burden on those already earning lower wages. Recently, more states are considering enacting laws that would require tipped employees to earn the full minimum wage.
The National Employment Law Project (NELP) has identified 34 states that have begun discussing the possibility of new wage laws that would mandate full minimum wages for tipped employees. This means that in those states employers would no longer be allowed to pay tipped employees an hourly wage that is lower than the standard minimum wage.
At the moment, employers are allowed to compensate their tipped employees an hourly wage as low as $2.13 per hour, as long as the tips bring up their total pay to meet the minimum wage standard.
However, many argue that this system is unfair. They argue that relying on tips can be unreliable and may lead to tipped employees earning far less then the standard minimum wage.
Employees in favor of the idea of full wages for tipped employees note that tipped workers are more likely to be female and are more likely to work part-time and are therefore at a greater risk of earning less than their male counterparts or full-time workers. Additionally, tipped workers in some states are more likely to be paid well below minimum wage when accounting for their tips.
At the moment, only seven states require employers to pay the full minimum wage to their tipped employees. Alaskas, California, Minnesota, Montana, Nevada, Oregon, and Washington all have laws in place that require tipped workers to earn the full minimum wage.
It will be interesting to see which other states pass laws requiring employers to pay the full minimum wage to their tipped employees this year. If these laws pass, it could have a huge impact on the earning potential of tipped employees.