Bill Overview
Title: Tipped Employee Protection Act
Description: This bill modifies the definition of a tipped employee under the Fair Labor Standards Act of 1938 to exclude consideration of an employee's duties when determining the combined amount of tips and direct wages an employee receives for the purpose of an employer meeting the minimum wage requirements. Under the bill, an employer may pay a tipped employee the tipped minimum wage for tasks that are not related to tipped work as long as the employee's combined tips and direct wages total at least the $7.25 federal minimum wage. Current Department of Labor rules prohibit an employer from paying the tipped minimum wage for tasks that are not related to tipped work.
Sponsors: Rep. Womack, Steve [R-AR-3]
Target Audience
Population: Individuals worldwide working as tipped employees
Estimated Size: 2600000
- The bill focuses on modifications to rules regarding tipped employees under the Fair Labor Standards Act (FLSA).
- The bill will impact employees who are classified as 'tipped employees'.
- These employees typically work in industries like food service, hospitality, and other customer-facing roles where tipping is common.
- The legislation relaxes restrictions on paying tipped employees the tipped minimum wage for non-tipped tasks, making it relevant to this worker group.
- Changes could affect the wages of these employees, especially in how and what tasks they are paid the tipped minimum wage versus the full minimum wage.
Reasoning
- The policy targets tipped employees, a population of about 2.6 million individuals in the U.S., focusing on those in sectors such as dining and hospitality.
- The impact will likely vary based on geographic location, type of establishment, and other employment conditions.
- The policy could result in reduced wages for some employees if they are paid the tipped minimum wage for non-tipped work.
- Some employees may appreciate the flexibility in job roles without a significant loss in overall income, provided their tips remain high.
- The budget constraints imply that the policy might not significantly increase total compensation due to limited overall funding.
- The policy change's visibility and communication will influence employee awareness and perception, affecting self-reported wellbeing.
Simulated Interviews
Waitress (New York, NY)
Age: 25 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 5.0 years
Commonness: 5/20
Statement of Opinion:
- The policy might lead to reduced wages for tasks not directly related to serving, which concerns me.
- I hope my overall tips won't be affected, but I'm wary of employers using this to pay less.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 7 |
| Year 2 | 6 | 7 |
| Year 3 | 6 | 7 |
| Year 5 | 5 | 7 |
| Year 10 | 5 | 6 |
| Year 20 | 5 | 6 |
Bartender (Los Angeles, CA)
Age: 34 | Gender: male
Wellbeing Before Policy: 8
Duration of Impact: 2.0 years
Commonness: 3/20
Statement of Opinion:
- I believe the change won't affect me much as most of my work is directly related to tipping.
- Nightclubs have a different dynamic, and tips are usually substantial.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 8 | 8 |
| Year 3 | 8 | 8 |
| Year 5 | 8 | 8 |
| Year 10 | 7 | 8 |
| Year 20 | 7 | 8 |
Housekeeping Attendant (Austin, TX)
Age: 28 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 4/20
Statement of Opinion:
- I'm worried that tasks not related to cleaning rooms, like organizing lobby events, might lower my hourly wage.
- I hope it doesn't impact how much I'm actually taking home weekly.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 6 |
| Year 2 | 5 | 6 |
| Year 3 | 5 | 6 |
| Year 5 | 6 | 7 |
| Year 10 | 6 | 7 |
| Year 20 | 6 | 7 |
Barista (Miami, FL)
Age: 22 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 3.0 years
Commonness: 4/20
Statement of Opinion:
- It's frustrating if I'm paid less for tasks like cleaning or restocking.
- However, my main income is supposed to come from tips.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 6 |
| Year 2 | 5 | 6 |
| Year 3 | 5 | 6 |
| Year 5 | 5 | 6 |
| Year 10 | 5 | 6 |
| Year 20 | 5 | 6 |
Concierge (Chicago, IL)
Age: 40 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 0.0 years
Commonness: 2/20
Statement of Opinion:
- As most of my work involves direct interaction and services related to tips, I don't see this change affecting me much.
- I think people could be worried unnecessarily.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 7 | 7 |
| Year 10 | 7 | 7 |
| Year 20 | 7 | 7 |
Casino Dealer (Las Vegas, NV)
Age: 30 | Gender: male
Wellbeing Before Policy: 9
Duration of Impact: 0.0 years
Commonness: 3/20
Statement of Opinion:
- The nature of my work will not really be impacted unless the casino changes policies drastically.
- I feel my income should remain stable.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 9 | 9 |
| Year 2 | 9 | 9 |
| Year 3 | 9 | 9 |
| Year 5 | 9 | 9 |
| Year 10 | 9 | 9 |
| Year 20 | 9 | 9 |
Restaurant Hostess (St. Louis, MO)
Age: 50 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 5.0 years
Commonness: 3/20
Statement of Opinion:
- Tasks such as handling reservations might be paid at a lower rate, which I hope doesn't dock overall pay much.
- I trust management will handle this wisely.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 6 | 6 |
| Year 5 | 6 | 7 |
| Year 10 | 6 | 7 |
| Year 20 | 6 | 7 |
Valet Parker (Atlanta, GA)
Age: 29 | Gender: other
Wellbeing Before Policy: 8
Duration of Impact: 5.0 years
Commonness: 3/20
Statement of Opinion:
- If this means I earn less for aiding guests with luggage rather than parking cars, it could affect my income.
- I’m hopeful the policy change won’t ding my paycheck too much.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 8 |
| Year 2 | 7 | 8 |
| Year 3 | 6 | 8 |
| Year 5 | 6 | 8 |
| Year 10 | 6 | 8 |
| Year 20 | 6 | 8 |
Banquet Server (Nashville, TN)
Age: 45 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 3.0 years
Commonness: 2/20
Statement of Opinion:
- Most of my income is vendor-related tips, so the change might not impact much unless events slow.
- Understanding how tasks are classified will be key.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 7 | 7 |
| Year 10 | 7 | 7 |
| Year 20 | 7 | 7 |
Spa Therapist (Seattle, WA)
Age: 31 | Gender: female
Wellbeing Before Policy: 8
Duration of Impact: 4.0 years
Commonness: 3/20
Statement of Opinion:
- If my duties include less direct client interaction, I'm worried about lower hourly compensation.
- Hopefully, management policies will fairly adjust the job descriptions.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 8 |
| Year 2 | 7 | 8 |
| Year 3 | 7 | 8 |
| Year 5 | 7 | 8 |
| Year 10 | 7 | 8 |
| Year 20 | 7 | 8 |
Cost Estimates
Year 1: $5000000 (Low: $3000000, High: $7000000)
Year 2: $5000000 (Low: $3000000, High: $7000000)
Year 3: $5000000 (Low: $3000000, High: $7000000)
Year 5: $5000000 (Low: $3000000, High: $7000000)
Year 10: $5000000 (Low: $3000000, High: $7000000)
Year 100: $5000000 (Low: $3000000, High: $7000000)
Key Considerations
- Impact on wages and job satisfaction of tipped employees for tasks unrelated to tipping.
- Potential cost savings for employers in sectors employing tipped workers, such as hospitality and food service.
- Changes in administrative compliance and potential enforcement costs regarding the federal minimum wage requirement.