Raise the Wage Act: Gradual Elimination of the Unfair Subminimum Wage for Tipped Workers

by NELP & Restaurant Opportunities Center United

As the Fight for $15 continues to grow from coast to coast, Congress is joining in the call for stronger action to raise wages. Led by Senators Patty Murray and Bernie Sanders in the Senate, and Representatives Bobby C. Scott and Keith Ellison in the House, congressional leaders are introducing the Raise the Wage Act.  It calls for raising the federal minimum wage to $15 an hour by 2024.  Equally significant, it also calls for gradually eliminating the outdated and unfair subminimum wage for tipped workers.  This fact sheet provides background on this long overdue reform, which would help combat poverty wages and pay inequality for this struggling, majority female workforce.

There is growing national momentum for raising pay for the nation’s millions of tipped workers such as restaurant servers, food delivery workers, and many others at the heart of industries like tourism and hospitality. Under current federal law, their minimum wage has been frozen at a meager $2.13 per hour since Bill Clinton was president.  While employers are supposed to make up the difference when tips are not enough to bring a worker up to the full minimum wage, in practice such tracking is difficult and compliance is spotty.

That’s why seven states have done away with the subminimum wage for tipped workers.  Instead they guarantee that tipped workers earn the same minimum wage as other workers—with tips an addition to, not a replacement for, a decent base wage.  The restaurant industries in these “One Fair Wage” states are thriving—showing that improved pay for tipped workers can go hand in hand with strong economic growth.

As the country moves closer to a $15 minimum wage, tipped workers will be left behind if they continue to be excluded from the basic minimum wage protections given to other workers. The Raise the Wage Act is an opportunity to guarantee fair pay for the nearly six million tipped workers across the country, and to address the economic insecurity—and the pressure to tolerate behavior such as sexual harassment—that workers face when so much of their income depends on tips left by customers.


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