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[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 9624 Introduced in House (IH)]

<DOC>

118th CONGRESS
  2d Session
                                H. R. 9624

To amend the Fair Labor Standards Act of 1938 to eliminate the separate 
       minimum wage for tipped employees, and for other purposes.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                           September 17, 2024

 Mr. Horsford (for himself and Mr. Norcross) introduced the following 
  bill; which was referred to the Committee on Ways and Means, and in 
addition to the Committee on Education and the Workforce, for a period 
    to be subsequently determined by the Speaker, in each case for 
consideration of such provisions as fall within the jurisdiction of the 
                          committee concerned

_______________________________________________________________________

                                 A BILL

 
To amend the Fair Labor Standards Act of 1938 to eliminate the separate 
       minimum wage for tipped employees, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Tipped Income Protection and Support 
Act'' or ``TIPS Act''.

SEC. 2. REPEAL OF SEPARATE MINIMUM WAGE FOR TIPPED EMPLOYEES.

    (a) Minimum Wage for Tipped Employees.--Section 3(m)(2)(A) of the 
Fair Labor Standards Act of 1938 (29 U.S.C. 203(m)(2)(A)) is amended to 
read as follows:
    ``(A) The wage required to be paid to a tipped employee shall be 
the wage set forth in section 6(a)(1). All tips received by such 
employee shall be retained by the employee, except that this subsection 
shall not be construed to prohibit the pooling of tips among employees 
who customarily and regularly receive tips.''.
    (b) Penalties.--Section 16 of the Fair Labor Standards Act of 1938 
(29 U.S.C. 216), as amended by this Act, is further amended--
            (1) in subsection (b), by striking ``the sum of any tip 
        credit taken by the employer and all such tips unlawfully kept 
        by the employer'' and inserting ``the sum of all such tips 
        unlawfully used or kept by the employer''; and
            (2) in subsection (c), by striking ``the sum of any tip 
        credit taken by the employer and all such tips unlawfully kept 
        by the employer'' and inserting ``the sum of all such tips 
        unlawfully used or kept by the employer''.

SEC. 3. DEDUCTION FOR CASH TIPS.

    (a) In General.--
            (1) Deduction allowed.--Part VII of subchapter B of chapter 
        1 of the Internal Revenue Code of 1986 is amended by 
        redesignating section 224 as section 225 and by inserting after 
        section 223 the following new section:

``SEC. 224. CASH TIPS.

    ``(a) In General.--There shall be allowed as a deduction an amount 
equal to the amount of qualified tips received during the taxable year 
that are included on statements furnished to the employer pursuant to 
section 6053(a).
    ``(b) Limitation.--No deduction shall be allowed under subsection 
(a) to any individual for any taxable year if the adjusted gross income 
of such individual for such taxable year exceeds $112,500.
    ``(c) Qualified Tips.--For purposes of this section, the term 
`qualified tips' means a tip received by an individual--
            ``(1) from an unrelated party,
            ``(2) who does not have an ownership stake in the business 
        which employs them in the job in for which such individual is 
        receiving a tip, and
            ``(3) in the course of such individual's employment in an 
        occupation which traditionally and customarily received tips, 
        including--
                    ``(A) cosmetology,
                    ``(B) hospitality,
                    ``(C) food and beverage service,
                    ``(D) parking attendants, and
                    ``(E) custodial service.''.
            (2) Conforming amendment.--The table of sections for part 
        VII of subchapter B of chapter 1 of such Code is amended by 
        redesignating the item relating to section 224 as relating to 
        section 225 and by inserting after the item relating to section 
        223 the following new item:

``Sec. 224. Cash tips.''.
    (b) Deduction Allowed to Non-Itemizers.--Section 63(b) of the 
Internal Revenue Code of 1986 is amended by striking ``and'' at the end 
of paragraph (3), by striking the period at the end of paragraph (4) 
and inserting ``and'', and by adding at the end the following new 
paragraph:
            ``(5) the deduction provided in section 224.''.
    (c) Non-Application of Certain Limitations for Itemizers.--
            (1) Deduction not treated as a miscellaneous itemized 
        deduction.--Section 67(b) of the Internal Revenue Code of 1986 
        is amended by striking ``and'' at the end of paragraph (11), by 
        striking the period at the end of paragraph (12) and inserting 
        ``, and'', and by adding at the end the following new 
        paragraph:
            ``(13) the deduction under section 224 (relating to cash 
        tips).''.
            (2) Deduction not taken into account under overall 
        limitation.--Section 68(c) of the Internal Revenue Code of 1986 
        is amended by striking ``and'' at the end of paragraph (2), by 
        striking the period at the end of paragraph (3) and inserting 
        ``, and'', and by adding at the end the following new 
        paragraph:
            ``(4) the deduction under section 224 (relating to cash 
        tips).''.
    (d) Withholding.--The Secretary of the Treasury (or the Secretary's 
delegate) shall modify the tables and procedures prescribed under 
section 3402(a) of the Internal Revenue Code of 1986 to take into 
account the deduction allowed under section 224 of such Code (as added 
by this Act).
    (e) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2024.
                                 <all>
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