Congress moves to eliminate subminimum wage for tipped workers nationwide
H.R. 1314 — TIPS Act · Filed by Steven Horsford (D-NV) · 30 cosponsors · Introduced Feb 13, 2025 · Referred to committee
Your members of Congress
Enter a ZIP to see where your representative and both senators stood on this bill.
Looked up on this device — your ZIP is never stored on our servers.
What it does
This bill eliminates the federal tipped minimum wage (currently $2.13/hour) and requires tipped employees to receive the full federal minimum wage ($7.25/hour). It also creates a new tax deduction for tipped workers earning under $112,500/year, allowing them to deduct qualified tips from their taxable income.
Why we flagged it
The bill's core mechanism is eliminating a subminimum wage and providing tax relief to tipped workers—a straightforward labor-standards and tax-policy measure aimed at improving worker compensation and reducing tax burden on low-income service employees.
What the text implies
- Restaurants and hospitality businesses may face significant labor-cost increases, potentially leading to menu-price increases, reduced hiring, or reduced tip-pooling flexibility.
- The tax deduction is capped at $112,500 AGI, creating a cliff effect where workers just above that threshold lose the benefit entirely, potentially creating perverse incentives around income reporting.
The full analysis lists 4 implications of this text.
Who stands to gain
tipped service workers (food and beverage, hospitality, cosmetology, parking attendants, custodial s