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Full Minimum Wage and Tax Deduction for Tipped Employees

This Act eliminates the separate, lower minimum wage for tipped employees, guaranteeing them the full federal minimum wage rate. It also introduces a new tax deduction for reported cash tips, reducing the tax burden for individuals earning below $112,500 annually. These changes aim to increase income stability and financial protection for service sector workers.
Key points
Guarantees the full federal minimum wage for all tipped employees (ending the lower tipped minimum wage).
Introduces a new income tax deduction for reported cash tips (up to an Adjusted Gross Income limit of $112,500).
All tips must be retained by the employee; penalties for employers unlawfully keeping tips are increased.
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Additional Information
TIPS Act
Print number: HR 9624
Sponsor: Rep. Horsford, Steven [D-NV-4]
Process start date: 2024-09-17