Congress moves to end the $2.13 tipped minimum wage—with a 3-year phase-in
H.R. 5112 — Tipped Worker Protection Act · Filed by Jahana Hayes (D-CT) · 13 cosponsors · Introduced Sep 3, 2025 · Referred to committee
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What it does
This bill eliminates the separate federal minimum wage for tipped employees (currently $2.13/hour) and requires them to be paid the full federal minimum wage ($7.25/hour). It phases in the change over several years, starting at $3.60/hour and increasing by $1.50 annually until reaching the standard minimum. The bill also strengthens protections for tips: employers cannot keep tips for any reason (including payment processing fees), employees can vote to establish tip pools, and mandatory service charges must be disclosed and paid to workers.
Why we flagged it
The bill's core mechanism is a scheduled increase in the minimum wage for tipped employees paired with new legal restrictions on employer use of tips and new worker voting rights over tip pooling. It is fundamentally a labor-protection measure, not a deregulation or carve-out.
What the text implies
- The phase-in period (starting at $3.60/hour, increasing $1.50/year) means tipped workers will not reach the full $7.25 minimum for approximately 3–4 years, creating a multi-year window of below-minimum wages for workers in states that do not set a higher tipped minimum.
- The definition of 'tipped employee' excludes workers who spend >20% of hours on non-tipped duties, potentially creating incentives for employers to reclassify workers or restructure job duties to avoid the higher wage floor.
The full analysis lists 5 implications of this text.
Who stands to gain
tipped workers (wage increase); hospitality and food-service workers (primary wage beneficiaries)