Reply #21: ... & this from the AFL-CIO... Workers Who Earn Tips Could Lose Thousands [View All]

[Sapphire Blue]

Workers Who Earn Tips Could Lose Thousands of Dollars Each Year in Republican Bill

It’s bad enough that House Republicans used a cynical legislative move to defuse the minimum wage issue—a hot potato for them in upcoming elections—by coupling a raise in the federal minimum wage with a $753 billion estate tax cut for millionaires.

But digging deeper into the bill shows the legislation is even worse than it first appears. The bill the House passed in the early morning hours July 29 actually will cut the wages of millions of workers who earn tips along with their hourly wages. That pay cut could be as much as $5.50 an hour, the Economic Policy Institute reports.

Here’s how it works. Under current federal law, employers do not have to pay the full minimum wage of $5.15 to workers who earn tips—bartenders, waiters and waitresses, hotel maids, hair dressers, parking attendants and dozens of other categories of tipped workers. Employers can pay tipped workers as little as $2.13 an hour and then claim that tips make up the difference between the $2.13 and $5.15 an hour. That’s called the trip credit.

But current law also says states may overrule the federal tip credit and require employers to pay the minimum wage, either the federal rate or a higher state minimum wage. For example, in Washington state, tipped workers earn the state minimum of $7.63 an hour plus tips. Tipped workers in Alaska, California, Minnesota, Montana, Nevada and Oregon also receive the full minimum wage with their tips.

The Republican estate tax bill takes away the power of the states to require employers to pay tipped workers the full minimum wage plus tips.

Continued @ http://blog.aflcio.org/2006/08/01/workers-who-earn-tips-could-lose-thousands-of-dollars-each-year-in-republican-bill