Nearly 50 years ago, federal law created a lower minimum wage for workers who receive tips. Congress decreed that it could not be less than 50 percent of the federal minimum wage.
But when the minimum wage inched up — raised to $5.25 in 1996 under President Clinton — Congress agreed, in a concession to the restaurant industry, to let the 50 percent rule on tip wages lapse.
Currently under federal law, restaurant owners are required to pay a minimum of $2.13 an hour toward a waiter’s wages as long as customers’ tips lift the waiter’s pay to the $7.25 federal minimum wage. (If tips are too small to reach the minimum wage, then the restaurant is required to top off the waiter’s pay.)
Nineteen states use the federal $2.13 tip wage, while 24 states have set a subminimum tip wage above that. Seven other states, most of them in the West, require waiters’ base pay to be at least the state minimum wage. In Washington State, with the nation’s highest state minimum wage, that means a waiter’s base wage, before tips, is $9.32 an hour.
And now, as some Democratic senators and President Obama push to raise the minimum wage to $10.10 an hour, from $7.25, they are also backing increases to the tip wage (at $2.13, it is 29 percent of the minimum wage). Once again, the restaurant industry is fiercely opposed to a mandated increase.
Pointing to studies showing that many waiters live below the poverty line, Senator Tom Harkin, Democrat of Iowa, and chairman of the Senate Health, Education, Labor and Pensions Committee, argues that it is unfair that restaurant owners pay so little toward wages.