I 
119TH CONGRESS 
1ST SESSION H. R. 5112 
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 3, 2025 
Mrs. HAYES (for herself, Ms. ADAMS, Ms. ANSARI, Ms. BONAMICI, Mr. CAR-
SON, Mr. JACKSON of Illinois, Ms. LEE of Pennsylvania, Mr. LIEU, Ms. 
SALINAS, Mr. THANEDAR, and Ms. TITUS) introduced the following bill; 
which was referred to the Committee on Education and Workforce, and 
in addition to the Committee on Ways and Means, for a period to be sub-
sequently 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. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Tipped Worker Protec-
tion Act’’. 
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(b), for which the hourly wage for such 1-year 
period would equal or exceed the minimum 
wage in effect under section 6(a)(1) as of the 
beginning of such 1-year period. 
(B) SPECIAL RULE FOR TIP POOLS ESTAB-
LISHED OR MAINTAINED DURING TRANSITION 
PERIOD.—In any case in which a system to pool 
tips is established for the non-supervisory em-
ployees of an employer in accordance with sec-
tion 3(m)(2)(D) of such Act (29 U.S.C. 
203(m)(2)(D)) (as added by section 3(d) of this 
Act) prior to the beginning of the 1-year period 
described in subparagraph (A), the amendments 
made by paragraphs (1) and (2) shall apply 
with respect to such employer beginning with 
the date on which such system is established. 
(b) MINIMUM WAGE FOR TIPPED EMPLOYEES DUR-
ING TRANSITION PERIOD.— 
(1) 
IN
GENERAL.—Clause 
(i) 
of 
section 
3(m)(2)(B) of the Fair Labor Standards Act of 
1938 (29 U.S.C. 203(m)(2)(A)), as so redesignated 
by section 3(a) of this Act, is amended to read as 
follows: 
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‘‘(i) the cash wage paid such em-
ployee, which for purposes of such deter-
mination shall be not less than— 
‘‘(I) for the 1-year period begin-
ning on the date of enactment of the 
Tipped Worker Protection Act, $3.60 
an hour; 
‘‘(II) for each succeeding 1-year 
period, an hourly wage equal to the 
amount determined under this clause 
for the preceding 1-year period in-
creased by $1.50 (but not to exceed 
the minimum wage in effect under 
section 6(a)(1) as of the beginning of 
such 1-year period); and’’. 
(2) DEFINITION OF TIPPED EMPLOYEE.—Sec-
tion 3(t) of such Act (29 U.S.C. 203(t)) is amended 
by striking ‘‘he customarily and regularly receives 
more than $30 a month in tips’’ and inserting ‘‘the 
employee customarily and regularly receives for each 
month an amount in tips equal to (or in excess of) 
the difference between the total cash wages paid to 
the employee under subsection (m)(2)(A)(i) for such 
month and the total wages that would have been 
paid to the employee for the hours worked in such 
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month pursuant to the minimum wage in effect 
under section 6(a)(1) but for subsection (m)(2), ex-
cept that an employee shall not be considered a 
‘tipped employee’ for any workweek in which the em-
ployee spends more than 20 percent of the employ-
ee’s hours of employment performing duties related 
to the employee’s occupation for which the employee 
does not directly receive tips’’. 
SEC. 3. REQUIREMENTS RELATING TO RETENTION AND 
POOLING OF TIPS. 
(a) TREATMENT OF CERTAIN AMOUNTS AS TIPS.— 
Section 3(m)(2) of the Fair Labor Standards Act of 1938 
(29 U.S.C. 203(m)(2)) is amended— 
(1) by redesignating subparagraphs (A) and 
(B) as subparagraphs (B) and (C), respectively; and 
(2) by inserting before subparagraph (A), as so 
redesignated, the following: 
‘‘(A) ‘Tip’ includes any discretionary amount paid di-
rectly to an employee by a customer and any portion of 
a mandatory charge imposed on a customer by the em-
ployer which is added to the cost of the product or service 
in any manner that may reasonably lead the customer to 
believe that the amount collected by the employer from 
such charge will be paid in full directly to the employee.’’. 
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(b) ALL TIPS RETAINED BY EMPLOYEES.—Subpara-
graph (B) of section 3(m)(2) of the Fair Labor Standards 
Act of 1938 (29 U.S.C. 203(m)(2)), as redesignated by 
subsection (a), is amended by striking ‘‘of this subsection’’ 
and all that follows through the end of the subparagraph 
and inserting ‘‘of this subsection. Any employee shall have 
the right to retain, regardless of whether received as part 
of a system to pool tips established in accordance with 
subparagraph (C), any tips received by such employee.’’. 
(c) NO TIPS RETAINED BY EMPLOYERS.—Subpara-
graph (C) of section 3(m)(2)(C) of the Fair Labor Stand-
ards Act of 1938 (29 U.S.C. 203(m)(2)), as redesignated 
by subsection (b), is amended to read as follows: 
‘‘(C)(i) Regardless of whether or not an employer 
takes a tip credit, the employer may not keep tips received 
by its employees for any purpose or use such tips for any 
purpose other than to facilitate the distribution to employ-
ees of the full amount of all such tips under a system to 
pool tips established in accordance with subparagraph (D). 
‘‘(ii) A violation of clause (i) includes— 
‘‘(I) allowing managers or supervisors to keep 
or use any portion of employees’ tips; and 
‘‘(II) keeping or using any portion of employ-
ees’ tips to cover the cost of financial transaction 
fees, including any fee established, charged, or re-
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ceived by a payment card network for the purpose 
of compensating an issuer for its involvement in a 
transaction in which a person uses a debit card or 
credit card (as the terms ‘‘debit card’’, ‘‘credit 
card’’, ‘‘issuer’’, and ‘‘payment card network’’ are 
defined in section 921(c) of the Electronic Fund 
Transfer Act (15 U.S.C. 1693o–2(c)))’’. 
(d) TIP POOLS.—Section 3(m)(2) of the Fair Labor 
Standards Act of 1938 (29 U.S.C. 203(m)(2)), as amend-
ed by this section, is further amended by adding at the 
end the following: 
‘‘(D)(i) In any case in which an employer is provided 
with written documentation demonstrating that not less 
than 30 percent of all of the non-supervisory employees 
of the employer request a vote on whether to establish or 
modify a system to pool tips in accordance with this sub-
paragraph, such a system shall be considered to be so es-
tablished or modified if the employer is provided with writ-
ten documentation demonstrating that not less than 51 
percent of all such employees vote in favor of establishing 
or modifying such a system. 
‘‘(ii) The employer shall maintain a written record 
of any vote to establish or modify a system to pool tips 
held pursuant to this subparagraph, including the name 
of each employee voting and the vote totals. The employer 
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shall provide a copy of such record to any employee upon 
request. 
‘‘(iii)(I) A system to pool tips established under this 
subparagraph shall be administered by the employer, at 
the employer’s expense, in a manner ensuring that— 
‘‘(aa) participation in the system is voluntary 
for each employee and determined without coercion 
from the employer; 
‘‘(bb) such tips are shared among all non-super-
visory employees participating in such system; 
‘‘(cc) funds held in such system are maintained 
separately from any other funds; and 
‘‘(dd) the records of such system are available 
to be examined by each such participating employee. 
‘‘(II) In administering a system to pool tips estab-
lished under this subparagraph, an employer may suggest 
reasonable and customary practices. 
‘‘(III) In any dispute among employees relating to the 
administration of a system to pool tips established under 
this subparagraph, the employer may mediate and impose 
a resolution of the dispute on the employees participating 
in the system only if— 
‘‘(aa) in the case of employees in a restaurant 
or similar retail food establishment, no agreement 
resolving the dispute can be reached among— 
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‘‘(AA) 50 percent or more of the partici-
pating service employees whose primary job du-
ties include direct interaction with customers; 
and 
‘‘(BB) 50 percent or more of all other par-
ticipating employees; and 
‘‘(bb) in the case of employees in any other es-
tablishment, no agreement resolving the dispute can 
be reached among 50 percent or more of the partici-
pating employees. 
‘‘(iv) An employer shall not be required to com-
pensate any employee participating in a system to pool 
tips established under this subparagraph in any case aris-
ing as a result of another participating employee with-
holding tips from such system. 
‘‘(v) An employer shall not discharge an employee or 
otherwise discriminate against an employee based on the 
employee’s vote with respect to, or participation in, a sys-
tem to pool tips established under this subparagraph. 
‘‘(vi) In this subparagraph, the term ‘non-supervisory 
employee’ means any employee who has, at any point in 
their typical duties, decision making authority over the 
scheduling of other employees, the hiring of other employ-
ees, or the termination of other employees.’’. 
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(e) SERVICE CHARGES.—Section 3(m)(2) of the Fair 
Labor Standards Act of 1938 (29 U.S.C. 203(m)(2)), as 
amended by this section, is further amended by adding 
at the end the following: 
‘‘(E)(i) In any case in which an employer imposes a 
mandatory charge on a customer which is added to the 
cost of the product or service, the employer shall— 
‘‘(I) disclose to the customer and to all employ-
ees involved in the sale of such product or delivery 
of such service— 
‘‘(aa) the reason for such charge; and 
‘‘(bb) the portion of such charge, if any, 
which upon its collection will be paid in full by 
the employer directly to employees; and 
‘‘(II) promptly pay to employees upon collection 
of such charge any portion identified in the disclo-
sure required under subclause (I)(bb). 
‘‘(ii) In any case in which an employer represents 
that a charge is payable at the discretion of the customer, 
the employer may not add such charge to the cost of any 
product or service unless first requested by the cus-
tomer.’’. 
(f) PENALTIES.—Section 16(e)(2) of the Fair Labor 
Standards Act of 1938 (29 U.S.C. 216(e)(2)) is amend-
ed— 
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(1) by striking ‘‘section 3(m)(2)(B)’’ and in-
serting ‘‘any provision of section 3(m)(2)’’; and 
(2) by inserting ‘‘or used’’ after ‘‘kept’’. 
(g) EFFECTIVE DATE.—The amendments made by 
this section shall take effect on the date of enactment of 
this Act and shall apply with respect to all tips received 
on or after such date. 
SEC. 4. SERVICE CHARGES TREATED AS TIPS FOR PUR-
POSES OF EMPLOYER CREDIT FOR SOCIAL 
SECURITY TAXES, ETC. 
(a) IN GENERAL.—Section 3121(q) of the Internal 
Revenue Code of 1986 is amended by adding at the end 
the following: ‘‘In the case of any mandatory charge to 
which section 3(m)(2)(E) of the Fair Labor Standards Act 
applies, the portion of such charge described in subclause 
(I)(bb) of such section shall be treated as tips for purposes 
of this subsection.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to amounts received on or after 
the date of the enactment of this Act. 
Æ 
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