This popular system is smart and efficient as it maximizes earnings for servers, allows restaurant operators to hire more employees, and fosters lower menu prices for customers.
Under the tipped income system, every tipped server is already making at least the minimum wage—often far more—with a portion paid by the restaurant owners and the rest made up by tips to equal the full state minimum wage.
The tip credit compensation model increases a server’s earning potential, which is why an overwhelming number of servers support the tip credit compensation model and don’t want to see it eliminated.
Watch our video showcasing how tipped income works, allowing restaurants to maintain competitive prices and servers to earn above-average wages through tips.
Under the tipped income system, every tipped server is already making at least the minimum wage—often far more—with a portion paid by the restaurant owners and the rest made up by tips to equal the full state minimum wage.
Now that you’ve learned about the value of the tipped income model, learn more about how the disruption of the system and the elimination of the tip credit is harming local restaurants across the country.
As efforts continue to eliminate the tipped minimum wage in Illinois, one major city that made the move is throwing in the towel.
After being blamed for the closure of numerous restaurants and thousands of job losses in the service industry, the mayor of Washington D.C. is calling for the repeal of a law requiring tipped employees to be paid the full minimum wage.
Mayor Muriel Bowser proposed Monday to repeal Initiative 82 — the controversial law, now nearly three years in effect, that eliminates D.C.’s tipped minimum wage.
Why it matters: This marks a turning point in the years-long battle over how and how much tipped workers are paid — a fight that’s changed the local restaurant industry and, some say, contributed to unprecedented closures and job losses.
D.C. Mayor Muriel Bowser is looking to bring back the tip credit after it was banned less than three years ago.
Washington, D.C. Mayor Muriel Bowser is pushing to restore the tipped minimum wage in Washington, D.C., just two and a half years after voters approved Initiative 82 to eliminate it. The move could make the district the first municipality to abolish and then reinstate the controversial tip credit system, which allows restaurants to pay servers below the standard minimum wage if gratuities are factored in.
A legislative proposal to eliminate an exemption for tipped workers in the state’s minimum wage law met with broad opposition from business groups, restaurateurs, and workers Thursday.
Opponents of the bill, which was presented for a discussion only before an Assembly panel and did not see a vote, said the plan would force business closures, price hikes, and cuts to worker compensation by requiring businesses to pay the full minimum wage to workers even if their tips bring their hourly pay above the wage floor.
Gov. Gretchen Whitmer has signed legislation trimming back changes to the state’s minimum wage and paid sick time policies.
Facing a tight midnight deadline, the Michigan Legislature negotiated late into the night on Thursday, as the Republican-led House and Democratic-led Senate each offered their own proposals for retaining the state’s tipped wage and modifying new sick time requirements; they ultimately reached a deal with Senate Bill 8 and House Bill 4002, clearing several hurdles which could have prevented either policy from becoming law.
Last week, GOP lawmakers left the Michigan Capitol Building and refused to return unless Democrats ordered up a vote on bills that would amend impending changes to the state’s tipped wage and paid sick leave laws.
They weren’t successful. Lame Duck ended without a vote, and waitstaff across Michigan are more wary than ever. It’s not that Republicans can’t or won’t take up the matter in January when they regain control of the legislature — it’s that time is of the essence.
A survey of nearly 4,000 tipped restaurant workers in eight battleground states found 90% prefer the current setup to getting a higher wage.
The task of killing the tip credit may have just gotten harder in the eight states where labor advocates have been concentrating their efforts…
Servers, restaurant owners and other members of the state’s hospitality industry on Wednesday urged Illinois lawmakers to reject a proposal that would eliminate the separate, lower minimum wage for tipped workers.
A coalition of tipped workers, service operators, and local businessesurged the General Assembly to reject aproposal that would eliminate the tip credit.
HB5345 says on Jan. 1, 2025, an employer shall not be entitled to an allowance for gratuities…
Initiative 82 has forced many full-service operators cut back as costs rise.
There have been grumblings of jobs losses from Washington, D.C., restaurants in the wake of Initiative 82, which was approved in 2022 and went into place last spring….
The 12% reduction compares with layoffs of 1.7% for limited-service places, according to federal data.
Full-service restaurants in Washington, D.C., have cut 3,700 jobs—about 12% of their workforce—since the jurisdiction began rolling back its tip credit in May 2023…
Eating places are closing at the rate of one per week because of the one-two-three combination.
A triple whammy of inflation, vacated offices and crime is devastating the restaurant industry of Washington, D.C., with establishments closing at a rate of roughly one per week, according to new research…
Massachusetts voters rejected a proposal to gradually increase how much employers must pay workers who collect tips, like servers in restaurants.
The state’s wage for tipped workers is now $6.75 an hour, while the minimum hourly wage for most other workers is $15. Now, if a worker doesn’t earn enough in tips to bring them up to $15 an hour, the employer must make up the difference.
Massachusetts voters rejected a measure to raise the tipped minimum wage from $6.75 an hour to $15, according to the Associated Press.
Why it matters: The measure would have shaken up tipping culture in Massachusetts and raised questions about its effects on restaurants and top-earning waiters and bartenders.
