What does Preamble of Tipped Worker Protection Act do?

This bill proposes to amend the Fair Labor Standards Act of 1938. The stated purpose is to repeal the separate minimum wage for tipped employees. The bill was introduced in the House of Representatives on September 3, 2025.

What does SHORT TITLE. of Tipped Worker Protection Act do?

This bill is formally titled the Tipped Worker Protection Act.

What does SCHEDULED REPEAL OF SEPARATE MINIMUM WAGE FOR TIPPED EMPLOYEES. of Tipped Worker Protection Act do?

This section amends the Fair Labor Standards Act of 1938 to repeal the separate minimum wage for tipped employees. It requires employers to pay tipped employees the standard minimum wage set forth in section 6(a)(1). The section modifies provisions related to the retention of tips and the definition of a tipped employee. Penalties for unlawful use or keeping of tips are adjusted. The amendments are delayed until the beginning of the first year where the hourly wage equals or exceeds the minimum wage under section 6(a)(1). A special rule applies to employers who establish tip pooling systems prior to the effective date, with the amendments applying upon system establishment. During a transition period, a tiered cash wage is established, starting at $3.60 per hour and increasing by $1.50 annually, but not exceeding the standard minimum wage.

What does REQUIREMENTS RELATING TO RETENTION AND POOLING OF TIPS. of Tipped Worker Protection Act do?

This section amends the Fair Labor Standards Act of 1938 regarding the treatment of tips. It clarifies that 'tip' includes discretionary amounts paid by customers and portions of mandatory charges added to the cost of products or services. Employees have the right to retain tips, regardless of whether they are part of a tip pooling system. Employers are prohibited from keeping or using employee tips except to facilitate tip distribution under a tip pooling system. Managers and supervisors cannot retain or use employee tips, and employers cannot use tips to cover financial transaction fees. To establish or modify a tip pooling system, an employer needs written documentation showing at least 30% of non-supervisory employees request a vote, and at least 51% vote in favor. Tip pooling systems must be voluntary, administered at the employer's expense, and ensure funds are maintained separately. Employers must disclose the reason for mandatory charges and the portion paid to employees. Penalties for violations of section 3(m)(2) are updated. The amendments take effect on the date of enactment and apply to tips received on or after that date.

What does SERVICE CHARGES TREATED AS TIPS FOR PURPOSES OF EMPLOYER CREDIT of Tipped Worker Protection Act do?

This section amends Section 3121(q) of the Internal Revenue Code of 1986. The amendment treats a portion of mandatory charges, as described in Section 3(m)(2)(E) of the Fair Labor Standards Act, as tips for purposes of Social Security taxes. The amendment applies to amounts received on or after the date of enactment of this Act.

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Tipped Worker Protection Act

Last updated: 9/3/2025 · Introduced: 9/3/2025

Author: Jahana Hayes (D-CT)

TL;DR (AI)

This bill eliminates the separate minimum wage for tipped employees, requiring employers to pay them the standard federal minimum wage.
It establishes new rules regarding tip retention and pooling, prohibiting employers from keeping tips and requiring voluntary, employee-approved tip pooling systems.
The bill modifies tax regulations to treat a portion of mandatory service charges as tips for Social Security tax purposes.

119th Congressin committeeOfficial page

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Other Sections

Includes provisions on preamble, short title., and 3 more.

5 sections

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