Federal Legislation To Decrease FLSA Tip Credit Proposed
Last Thursday, Donna Edwards (D-MD) introduced a bill to the House of Representatives which would increase the tip credit minimum wage for the first time since 1991. The Working For Adequate Gains For Employment In Services Act (WAGE Act) would increase the tip credit minimum wage to $3.75/hour under federal law, with subsequent increases culminating in an increase to $5.50/hour after two years. While the full federal minimum wage for non-tipped workers has increased in recent years, the tip credit minimum wage has remained $2.13/hour since 1991.
This proposed legislation would increase the wage compensation requirements under federal law. Of course, these new federal requirements would need to be compared with state obligations, which may impose higher rates as numerous states, including New York, California and Massachusetts, currently do.
