Sponsor
Andrew S. Biggs
Representative · R-AZ
Representative · R-AZ
The bill lets employers and staff broaden tip-pooling if tipped workers are paid at least the full minimum wage—giving businesses clearer flexibility and potentially fairer tip sharing, but risking reduced take-home pay for tipped workers, higher labor costs for employers, and implementation disputes.
Small-business employers gain clearer ability to include non-tipped employees in tip pools if tipped employees are paid at least the full minimum wage, reducing litigation risk and allowing more flexible staffing and tip arrangements.
Tipped employees paid at least the full minimum wage and their non-tipped coworkers can legally share tips, which can improve teamwork and produce a fairer distribution of service income across staff.
Tipped workers may see lower personal tip shares when non-tipped employees are added to tip pools, reducing take-home pay for many service workers.
Employers must pay tipped workers at least the full minimum wage before pooling tips, which could raise direct labor costs and lead to higher prices, reduced staffing, or fewer hours.
Unclear rules about who qualifies, how the tip credit is accounted for, and other implementation details could create compliance costs, disputes, and litigation for employers and workers.
Based on analysis of 2 sections of legislative text.
Allows employers to require tip pools that include non-tipped employees if tipped employees in the pool are paid at least the full federal minimum wage.
Official title: To amend the Fair Labor Standards Act of 1938 to allow the pooling of tips among all employees, and for other purposes.
Introduced January 3, 2025 by Andrew S. Biggs · Last progress January 3, 2025
Amends the Fair Labor Standards Act tip-pooling rule to let employers require larger tip pools that can include non-tipped employees, but only when the tipped employees in the same pool are paid at or above the federal minimum wage. In short, businesses could share tips more broadly if they guarantee tipped staff at least the full minimum wage rather than using a subminimum tipped wage.