I 

118TH CONGRESS 

1ST SESSION H. R. 5369 

To amend the Fair Labor Standards Act of 1938 to repeal the separate 

minimum wage for tipped employees, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

SEPTEMBER 8, 2023 

Mrs. HAYES (for herself, Ms. BONAMICI, Ms. SCHAKOWSKY, Ms. TITUS, Mr. 

THOMPSON of Mississippi, Mr. CARTER of Louisiana, Mr. BOWMAN, Mrs. 

WATSON COLEMAN, and Mr. JACKSON of Illinois) introduced the following bill; which was referred to the Committee on Education and the 

Workforce, and in addition to the Committee on Ways and Means, 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 repeal 

the separate minimum wage for tipped employees, and 

for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Tipped Worker Protec5 tion Act’’. 


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1 SEC. 2. SCHEDULED REPEAL OF SEPARATE MINIMUM 

2 WAGE FOR TIPPED EMPLOYEES. 

3 (a) IN GENERAL.— 

4 (1) REPEAL.—Section 3(m)(2)(B) of the Fair 

5 Labor Standards Act of 1938 (29 U.S.C. 

6 203(m)(2)(A)), as so redesignated by section 3(a) 

7 and as amended by section 3(b) of this Act, is 

8 amended by striking the sentence beginning with ‘‘In 

9 determining the wage an employer is required to pay 

10 a tipped employee,’’ and all that follows through ‘‘of 

11 this subsection.’’ and inserting ‘‘The wage required 

12 to be paid to a tipped employee shall be the wage 

13 set forth in section 6(a)(1).’’. 

14 (2) CONFORMING AMENDMENTS.— 

15 (A) RETENTION OF TIPS.—Section 

16 3(m)(2)(C) of the Fair Labor Standards Act of 

17 1938 (29 U.S.C. 203(m)(2)(B)), as so redesig18 nated by section 3(a) and as amended by sec19 tion 3(c) of this Act, is further amended in 

20 clause (i) of such section 3(m)(2)(C) by striking 

21 ‘‘Regardless of whether or not an employer 

22 takes a tip credit, the employer’’ and inserting 

23 ‘‘An employer’’. 

24 (B) STATUS AS A TIPPED EMPLOYEE.— 

25 Subsection (t) of section 3 of the Fair Labor 


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1 Standards Act of 1938 (29 U.S.C. 203) is re2 pealed. 

3 (C) PENALTIES.—Section 16 of the Fair 

4 Labor Standards Act of 1938 (29 U.S.C. 216), 

5 as amended by this Act, is further amended— 

6 (i) in subsection (b), by striking ‘‘the 

7 sum of any tip credit taken by the em8 ployer and all such tips unlawfully kept by 

9 the employer’’ and inserting ‘‘the sum of 

10 all such tips unlawfully used or kept by the 

11 employer’’; and 

12 (ii) in subsection (c), by striking ‘‘the 

13 sum of any tip credit taken by the em14 ployer and all such tips unlawfully kept by 

15 the employer’’ and inserting ‘‘the sum of 

16 all such tips unlawfully used or kept by the 

17 employer’’. 

18 (3) DELAYED EFFECTIVE DATE.— 

19 (A) IN GENERAL.—Except as provided in 

20 subparagraph (B), the amendments made by 

21 paragraphs (1) and (2) shall take effect with 

22 the beginning of the first 1-year period de23 scribed in 3(m)(2)(A)(i) of the Fair Labor 

24 Standards Act of 1938 (29 U.S.C. 

25 203(m)(2)(A)(i)), as amended by subsection 


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1 (b), for which the hourly wage for such 1-year 

2 period would equal or exceed the minimum 

3 wage in effect under section 6(a)(1) as of the 

4 beginning of such 1-year period. 

5 (B) SPECIAL RULE FOR TIP POOLS ESTAB6 LISHED OR MAINTAINED DURING TRANSITION

7 PERIOD.—In any case in which a system to pool 

8 tips is established for the non-supervisory em9 ployees of an employer in accordance with sec10 tion 3(m)(2)(D) of such Act (29 U.S.C. 

11 203(m)(2)(D)) (as added by section 3(d) of this 

12 Act) prior to the beginning of the 1-year period 

13 described in subparagraph (A), the amendments 

14 made by paragraphs (1) and (2) shall apply 

15 with respect to such employer beginning with 

16 the date on which such system is established. 

17 (b) MINIMUM WAGE FOR TIPPED EMPLOYEES DUR18 ING TRANSITION PERIOD.— 

19 (1) IN GENERAL.—Clause (i) of section 

20 3(m)(2)(B) of the Fair Labor Standards Act of 

21 1938 (29 U.S.C. 203(m)(2)(A)), as so redesignated 

22 by section 3(a) of this Act, is amended to read as 

23 follows: 


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1 ‘‘(i) the cash wage paid such em2 ployee, which for purposes of such deter3 mination shall be not less than— 

4 ‘‘(I) for the 1-year period begin5 ning on the date of enactment of the 

6 Tipped Worker Protection Act, $3.60 

7 an hour; 

8 ‘‘(II) for each succeeding 1-year 

9 period, an hourly wage equal to the 

10 amount determined under this clause 

11 for the preceding 1-year period in12 creased by $1.50 (but not to exceed 

13 the minimum wage in effect under 

14 section 6(a)(1) as of the beginning of 

15 such 1-year period); and’’. 

16 (2) DEFINITION OF TIPPED EMPLOYEE.—Sec17 tion 3(t) of such Act (29 U.S.C. 203(t)) is amended 

18 by striking ‘‘he customarily and regularly receives 

19 more than $30 a month in tips’’ and inserting ‘‘the 

20 employee customarily and regularly receives for each 

21 month an amount in tips equal to (or in excess of) 

22 the difference between the total cash wages paid to 

23 the employee under subsection (m)(2)(A)(i) for such 

24 month and the total wages that would have been 

25 paid to the employee for the hours worked in such 


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1 month pursuant to the minimum wage in effect 

2 under section 6(a)(1) but for subsection (m)(2), ex3 cept that an employee shall not be considered a 

4 ‘tipped employee’ for any workweek in which the em5 ployee spends more than 20 percent of the employ6 ee’s hours of employment performing duties related 

7 to the employee’s occupation for which the employee 

8 does not directly receive tips’’. 

9 SEC. 3. REQUIREMENTS RELATING TO RETENTION AND 

10 POOLING OF TIPS. 

11 (a) TREATMENT OF CERTAIN AMOUNTS AS TIPS.— 

12 Section 3(m)(2) of the Fair Labor Standards Act of 1938 

13 (29 U.S.C. 203(m)(2)) is amended— 

14 (1) by redesignating subparagraphs (A) and 

15 (B) as subparagraphs (B) and (C), respectively; and 

16 (2) by inserting before subparagraph (A), as so 

17 redesignated, the following: 

18 ‘‘(A) ‘Tip’ includes any discretionary amount paid di19 rectly to an employee by a customer and any portion of 

20 a mandatory charge imposed on a customer by the em21 ployer which is added to the cost of the product or service 

22 in any manner that may reasonably lead the customer to 

23 believe that the amount collected by the employer from 

24 such charge will be paid in full directly to the employee.’’. 


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1 (b) ALL TIPS RETAINED BY EMPLOYEES.—Subpara2 graph (B) of section 3(m)(2) of the Fair Labor Standards 

3 Act of 1938 (29 U.S.C. 203(m)(2)), as redesignated by 

4 subsection (a), is amended by striking ‘‘of this subsection’’ 

5 and all that follows through the end of the subparagraph 

6 and inserting ‘‘of this subsection. Any employee shall have 

7 the right to retain, regardless of whether received as part 

8 of a system to pool tips established in accordance with 

9 subparagraph (C), any tips received by such employee.’’. 

10 (c) NO TIPS RETAINED BY EMPLOYERS.—Subpara11 graph (C) of section 3(m)(2)(C) of the Fair Labor Stand12 ards Act of 1938 (29 U.S.C. 203(m)(2)), as redesignated 

13 by subsection (b), is amended to read as follows: 

14 ‘‘(C)(i) Regardless of whether or not an employer 

15 takes a tip credit, the employer may not keep tips received 

16 by its employees for any purpose or use such tips for any 

17 purpose other than to facilitate the distribution to employ18 ees of the full amount of all such tips under a system to 

19 pool tips established in accordance with subparagraph (D). 

20 ‘‘(ii) A violation of clause (i) includes— 

21 ‘‘(I) allowing managers or supervisors to keep 

22 or use any portion of employees’ tips; and 

23 ‘‘(II) keeping or using any portion of employ24 ees’ tips to cover the cost of financial transaction 

25 fees, including any fee established, charged, or reVerDate Sep 11 2014 03:58 Sep 09, 2023 Jkt 039200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H5369.IH H5369

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1 ceived by a payment card network for the purpose 

2 of compensating an issuer for its involvement in a 

3 transaction in which a person uses a debit card or 

4 credit card (as the terms ‘‘debit card’’, ‘‘credit 

5 card’’, ‘‘issuer, and ‘‘payment card network’’ are de6 fined in section 921(c) of the Electronic Fund 

7 Transfer Act (15 U.S.C. 1693o–2(c)))’’.’’. 

8 (d) TIP POOLS.—Section 3(m)(2) of the Fair Labor 

9 Standards Act of 1938 (29 U.S.C. 203(m)(2)), as amend10 ed by this section, is further amended by adding at the 

11 end the following: 

12 ‘‘(D)(i) In any case in which an employer is provided 

13 with written documentation demonstrating that not less 

14 than 30 percent of all of the non-supervisory employees 

15 of the employer request a vote on whether to establish or 

16 modify a system to pool tips in accordance with this sub17 paragraph, such a system shall be considered to be so es18 tablished or modified if the employer is provided with writ19 ten documentation demonstrating that not less than 51 

20 percent of all such employees vote in favor of establishing 

21 or modifying such a system. 

22 ‘‘(ii) The employer shall maintain a written record 

23 of any vote to establish or modify a system to pool tips 

24 held pursuant to this subparagraph, including the name 

25 of each employee voting and the vote totals. The employer 


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1 shall provide a copy of such record to any employee upon 

2 request. 

3 ‘‘(iii)(I) A system to pool tips established under this 

4 subparagraph shall be administered by the employer, at 

5 the employer’s expense, in a manner ensuring that— 

6 ‘‘(aa) participation in the system is voluntary 

7 for each employee and determined without coercion 

8 from the employer; 

9 ‘‘(bb) such tips are shared among all non-super10 visory employees participating in such system; 

11 ‘‘(cc) funds held in such system are maintained 

12 separately from any other funds; and 

13 ‘‘(dd) the records of such system are available 

14 to be examined by each such participating employee. 

15 ‘‘(II) In administering a system to pool tips estab16 lished under this subparagraph, an employer may suggest 

17 reasonable and customary practices. 

18 ‘‘(III) In any dispute among employees relating to the 

19 administration of a system to pool tips established under 

20 this subparagraph, the employer may mediate and impose 

21 a resolution of the dispute on the employees participating 

22 in the system only if— 

23 ‘‘(aa) in the case of employees in a restaurant 

24 or similar retail food establishment, no agreement 

25 resolving the dispute can be reached among— 


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1 ‘‘(AA) 50 percent or more of the partici2 pating service employees whose primary job du3 ties include direct interaction with customers; 

4 and 

5 ‘‘(BB) 50 percent or more of all other par6 ticipating employees; and 

7 ‘‘(bb) in the case of employees in any other es8 tablishment, no agreement resolving the dispute can 

9 be reached among 50 percent or more of the partici10 pating employees. 

11 ‘‘(iv) An employer shall not be required to com12 pensate any employee participating in a system to pool 

13 tips established under this subparagraph in any case aris14 ing as a result of another participating employee with15 holding tips from such system. 

16 ‘‘(v) An employer shall not discharge an employee or 

17 otherwise discriminate against an employee based on the 

18 employee’s vote with respect to, or participation in, a sys19 tem to pool tips established under this subparagraph. 

20 ‘‘(vi) In this subparagraph, the term ‘non-supervisory 

21 employee’ means any employee who has, at any point in 

22 their typical duties, decision making authority over the 

23 scheduling of other employees, the hiring of other employ24 ees, or the termination of other employees.’’. 


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1 (e) SERVICE CHARGES.—Section 3(m)(2) of the Fair 

2 Labor Standards Act of 1938 (29 U.S.C. 203(m)(2)), as 

3 amended by this section, is further amended by adding 

4 at the end the following: 

5 ‘‘(E)(i) In any case in which an employer imposes a 

6 mandatory charge on a customer which is added to the 

7 cost of the product or service, the employer shall— 

8 ‘‘(I) disclose to the customer and to all employ9 ees involved in the sale of such product or delivery 

10 of such service— 

11 ‘‘(aa) the reason for such charge; and 

12 ‘‘(bb) the portion of such charge, if any, 

13 which upon its collection will be paid in full by 

14 the employer directly to employees; and 

15 ‘‘(II) promptly pay to employees upon collection 

16 of such charge any portion identified in the disclo17 sure required under subclause (I)(bb). 

18 ‘‘(ii) In any case in which an employer represents 

19 that a charge is payable at the discretion of the customer, 

20 the employer may not add such charge to the cost of any 

21 product or service unless first requested by the cus22 tomer.’’. 

23 (f) PENALTIES.—Section 16(e)(2) of the Fair Labor 

24 Standards Act of 1938 (29 U.S.C. 216(e)(2)) is amend25 ed— 


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1 (1) by striking ‘‘section 3(m)(2)(B)’’ and in2 serting ‘‘any provision of section 3(m)(2)’’; and 

3 (2) by inserting ‘‘or used’’ after ‘‘kept’’. 

4 (g) EFFECTIVE DATE.—The amendments made by 

5 this section shall take effect on the date of enactment of 

6 this Act and shall apply with respect to all tips received 

7 on or after such date. 

8 SEC. 4. SERVICE CHARGES TREATED AS TIPS FOR PUR9 POSES OF EMPLOYER CREDIT FOR SOCIAL 

10 SECURITY TAXES, ETC. 

11 (a) IN GENERAL.—Section 3121(q) of the Internal 

12 Revenue Code of 1986 is amended by adding at the end 

13 the following: ‘‘In the case of any mandatory charge to 

14 which section 3(m)(2)(E) of the Fair Labor Standards Act 

15 applies, the portion of such charge described in subclause 

16 (I)(bb) of such section shall be treated as tips for purposes 

17 of this subsection.’’. 

18 (b) EFFECTIVE DATE.—The amendment made by 

19 this section shall apply to amounts received on or after 

20 the date of the enactment of this Act. 

Æ 


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