Minimum Wage Tip Credit

Section 3(m) of the Fair Labor Standards Act of 1938 (29 U.S.C. 203(m)) is amended— (1)in paragraph (2), by inserting before the period the following: Provided, That the tips shall not be included as part of the wage paid to an employee to the extent they are excluded therefrom under the terms of a bona fide collective bargaining agreement applicable to the particular employee; (2)by striking (m) Wage and inserting (m)(1) Wage; (3)by striking (1) the cash and inserting (A) the cash; (4)by striking (2) an additional and inserting (B) an additional; and (5)by adding at the end the following new paragraph:

(2)Notwithstanding any other provision of this Act, any State or political subdivision of a State which, on or after the date of enactment of the Minimum Wage Fairness Act of 2007, prohibits any portion of a tipped employee’s tips from being considered as wages in determining if such tipped employee has been paid the minimum wage rate, may not establish or enforce any such law, ordinance, regulation, or order with respect to tipped employees unless such law, ordinance, regulation, or order permits a tip credit in an amount not less than an amount equal to— (A)the cash wage paid such employee which is required under such law, ordinance, regulation, or order on the date of enactment of such Act; and (B)an additional amount on account of tips received by such employee which amount is equal to the difference between such cash wage and the minimum wage rate in effect under such law, ordinance, regulation, or order or the minimum wage rate in effect under section 6, whichever is higher.