“Getting a Raise? More States Looking to Guarantee Full Minimum Wages for Tip Earners in 2021!

Though tip earners in the US have traditionally been exempt from the federal minimum wage requirement, more states are beginning to consider enacting wage regulations that would change this and make sure that any wage earned includes a full minimum wage. This is a major shift in thinking when it comes to wages for those who are paid, at least in part, through tips. The growth in minimum wage and living wage requirements across the US is compelling legislators to consider changing the traditional rules that govern the payment of workers who are paid in tips. For instance, Illinois is currently considering a wage requirement that would force employers to pay the full minimum wage for tip earners. The proposal would establish guidelines that would guarantee workers at least $15 per hour, up from the current minimum wage of $13 an hour. The proposal would also end the practice of employers mandating that tips received by employees should be shared with managers or other staff. Supporters of this shift in focus for minimum wage advocate for the change, citing that there tends to be a larger gender pay gap among tipped workers, as the majority of tipped positions are held by women. Furthermore, many tipped positions do not carry benefits such as vacation, health care, and other job protections, leaving many vulnerable and unable to access the basic protections necessary for a more prosperous position. The number of states considering rules related to wages for tipped employees is only expected to increase in 2021. As the consideration of minimum wages and living wages continues to be debated in government chambers across the US, stricter regulations and protections for tip earners seem likely in the near future.