Tipped workers would gradually earn the full federal minimum wage directly from their employers.
This bill would gradually require employers to pay tipped workers the full federal minimum wage, ending the current system where tips make up part of their wage. It also sets clear rules for how tips are defined, kept, and shared, protecting employees from misuse of their earnings. These new tip rules would take effect immediately if the bill becomes law.
Today, federal law lets employers pay tipped employees a lower cash wage, relying on tips to reach the full minimum wage. This bill would gradually raise the cash wage employers pay, starting at $3.60 an hour, until it reaches the full federal minimum wage, ending the separate lower wage for tipped workers. For some employers, this repeal could happen sooner if they set up a tip pooling system early. The bill would also change the definition of a 'tipped employee' during this time, excluding those who spend more than 20 percent of their workweek on non-tipped duties. It would also set clear rules for how tips are defined, kept, and shared, and how mandatory service charges are handled, with these tip-related provisions taking effect immediately.
HR 5112 · 119th Congress · September 3, 2025 · AI Summary by gemini-2.5-flash · 9/10
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