Tipped Worker Protection Act
Sponsored By: Representative Hayes
Introduced
Summary
Eliminate the separate tipped minimum wage and tip credit system. This bill would make the regular minimum wage the baseline for tipped employees and create a multi-year transition to higher cash wages while overhauling how tips and service charges are handled.
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- Workers: Tipped employees would see a staged cash-wage path starting at $3.60 per hour in year one and increasing by $1.50 each year until it reaches the full minimum wage. Employers would no longer be allowed to rely on tip credits or keep tips.
- Employers and customers: Mandatory service charges would have to be disclosed and the portion paid to employees identified and paid promptly. Employers may not use tips to cover transaction or card-processing fees and must administer tip pools at their own expense.
- Tip governance and tax rules: Tip pools require a worker vote to establish and protections prevent retaliation for participating. Penalties are expanded to cover unlawful use of tips and certain service charges would be treated as tips for Social Security tax purposes.
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Bill Overview
Analyzed Economic Effects
4 provisions identified: 3 benefits, 0 costs, 1 mixed.
Phase out sub-minimum wage for tipped workers
This bill would phase out the lower cash wage for tipped workers. For the first year after enactment, employers would have to pay at least $3.60 per hour in cash. Each year after, that cash wage would rise by $1.50, but never above the regular federal minimum wage in effect at the start of that year. The bill would also tighten who counts as a tipped employee: your monthly tips must at least fill the gap between your cash pay and the regular minimum, and weeks with over 20% non‑tipped work would not count. Other changes tied to ending the separate tipped wage would start once the transition wage equals the regular minimum; if an employer sets up an approved tip pool earlier, those changes would start for that employer then.
Stronger rights for workers to keep tips
This bill would give workers a clear right to keep their tips. Employers, managers, and supervisors would be barred from keeping any part of tips or using tips to pay card or other fees. If an employer adds a mandatory service charge, they would have to tell customers and staff why and what share goes to workers, and pay that share to workers when collected. If a charge is called discretionary, it could be added only if the customer asks. Workers could recover the full amount of tips an employer unlawfully used or kept, starting on the law’s enactment date.
Payroll tax credit for service charges
The part of a mandatory service charge that an employer promises to pay to workers would count as tips for the existing employer payroll tax credit. This could lower Social Security payroll taxes for many hospitality businesses. It would apply to amounts received on or after the law’s enactment.
New voting and rules for tip pools
Tip pools would be set up only after a vote: at least 30% of non‑supervisory staff ask for it and 51% approve. Employers would have to keep written vote records, run the pool at their own cost, keep funds separate, and let workers see records. The bill would define who counts as non‑supervisory for pooling and ban retaliation for voting or taking part. If workers cannot agree, employers could impose a solution only after certain votes fail (two 50% groups in restaurants; 50% overall elsewhere). Employers would not have to repay workers for tips stolen by a coworker in an approved pool.
Sponsors & CoSponsors
Sponsor
Hayes
CT • D
Cosponsors
Adams
NC • D
Sponsored 9/3/2025
Ansari
AZ • D
Sponsored 9/3/2025
Bonamici
OR • D
Sponsored 9/3/2025
Carson
IN • D
Sponsored 9/3/2025
Jackson (IL)
IL • D
Sponsored 9/3/2025
Lee (PA)
PA • D
Sponsored 9/3/2025
Lieu
CA • D
Sponsored 9/3/2025
Salinas
OR • D
Sponsored 9/3/2025
Thanedar
MI • D
Sponsored 9/3/2025
Titus
NV • D
Sponsored 9/3/2025
Randall
WA • D
Sponsored 9/8/2025
Roll Call Votes
No roll call votes available for this bill.
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