WASHINGTON, DC – Yesterday, Representative Donald Norcross (D-NJ) introduced the Tipped Income Protection and Standards (TIPS) Act to eliminate the subminimum wage for tipped workers across the United States and end the income tax on tips these workers receive. The bill seeks to ensure that all workers, regardless of their profession, are fairly compensated. 

“Far too many workers across the United States are struggling to put food on the table. By eliminating the subminimum wage and income tax for tips, we can put more money into the pockets of tipped workers, and finally give these folks a fair day’s pay for a hard day’s work,” said Congressman Donald Norcross. “While there’s still more work to be done when it comes to increasing the federal minimum wage, this legislation marks a pivotal step in the right direction toward ensuring tipped workers can experience less financial stress, provide higher quality service, and will improve overall workplace morale.”

Under the current federal law, tipped workers can be paid as little as $2.13 an hour in several states, allowing employers to rely on customer tips to meet the minimum wage requirements. Several states, including Nevada, California, and Washington have eliminated the subminimum wage and seen positive results.

The Tipped Income Protection and Standards (TIPS) Act will:

• Eliminate the subminimum wage for tipped workers, bringing them up to federal minimum wage.
• Eliminate taxes on tips for workers who:
• Make under $112,500 a year.
• Work in an occupation that traditionally receives tips.
• Received the tip from an unrelated party who does not have an ownership stake in that business.

Representative Steven Horsford (NV-04) joined Representative Norcross in introducing the legislation.

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