The new budget bill protects restaurant workers’ tips

March 30, 2018

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The federal budget bill includes a provision that offers protections for tipped restaurant workers — so, most servers in the United States.


An employer may not keep tips received by its employees for any purposes ... regardless of whether or not the employer takes a tip credit.

— Page 2,025 of the bill

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If employers violate the rule, they’ll be fined up to $1,100 for each violation, will be liable for the stolen tips and may also be liable for damages.

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However, the bill doesn’t prohibit tip pooling (sharing tips between front and back of house) in establishments where the minimum wage is paid to all.

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Federal law lets employers pay workers who receive tips as little as $2.13 per hour, as long as the wage plus tips adds up to at least the federal minimum wage.

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In seven states and one U.S. territory, state law says employers have to pay tipped employees the full state minimum wage before figuring in tips.

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In a majority of states, state law requires employers pay these employees more than the $2.13-per-hour minimum the federal Fair Labor Standards Act established.

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In the rest of the states and territories, the minimum hourly wage for tipped employees can be the same as the minimum required under the FLSA.

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Saru Jayaraman, co-founder and president of the Restaurants Opportunities Center United, told Mic the budget provision is “unbelievably historic.”

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