March 30, 2018
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
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.
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.
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.
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.
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.
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.
Saru Jayaraman, co-founder and president of the Restaurants Opportunities Center United, told Mic the budget provision is “unbelievably historic.”
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