[House Report 119-420]
[From the U.S. Government Publishing Office]
119th Congress } { Report
HOUSE OF REPRESENTATIVES
1st Session } { 119-420
======================================================================
TIPPED EMPLOYEE PROTECTION ACT
_______
December 30, 2025.--Committed to the Committee of the Whole House on
the State of the Union and ordered to be printed
_______
Mr. Walberg, from the Committee on Education and Workforce, submitted
the following
R E P O R T
together with
MINORITY VIEWS
[To accompany H.R. 2312]
The Committee on Education and Workforce, to whom was
referred the bill (H.R. 2312) to amend the Fair Labor Standards
Act of 1938 to revise the definition of the term ``tipped
employee'', and for other purposes, having considered the same,
reports favorably thereon with an amendment and recommends that
the bill as amended do pass.
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Tipped Employee Protection Act''.
SEC. 2. TIPPED EMPLOYEES.
Section 3(t) of the Fair Labor Standards Act of 1938 (29 U.S.C.
203(t)) is amended--
(1) by striking ``(t)'' and inserting ``(t)(1)'';
(2) by striking ``engaged in an occupation in which he
customarily and regularly receives more than $30 a month in
tips.'' and inserting ``, without regard to the duties of the
employee, who receives tips and other cash wages for a work
period described in paragraph (2) at a rate that, when combined
with the cash wage required under subsection (m)(2)(A)(i), is
not less than the wage in effect under section 6(a)(1).''; and
(3) by adding at the end the following:
``(2) A work period described in this paragraph is a work period that
is determined by the employer of the employee, such as a work period of
1 day, 1 week, every 2 weeks, every 28 days, or every pay period.''.
Purpose
To amend the Fair Labor Standards Act of 1938 to revise the
definition of the term ``tipped employee.''
Committee Action
117TH CONGRESS
Second Session--Legislative Action
On December 13, 2022, Representative Steve Womack (R-AR)
introduced H.R. 9523, the Tipped Employee Protection Act of
2022, which was referred to the Committee on Education and
Labor.
118TH CONGRESS
First Session--Legislative Action
On March 14, 2023, Representative Womack introduced H.R.
1612, the Tipped Employee Protection Act of 2023, with
Representative Pete Sessions (R-TX) as an original cosponsor.
The bill was referred to the Committee on Education and the
Workforce.
Second Session--Hearing
On September 18, 2024, the Subcommittee on Workforce
Protections held a hearing entitled ``Examining the Biden-
Harris Attacks on Tipped Workers,'' which included discussion
of how the Biden-Harris administration was limiting the hours
that employers could credit employee's tips towards the federal
minimum wage. Witnesses were Mr. Tom Boucher, Owner, Great NH
Restaurants, Inc., Bedford, New Hampshire, on behalf of the
National Restaurant Association; Mr. Paul DeCamp, Member,
Epstein, Becker and Green, P.C., Washington, D.C.; Ms. Simone
Barron, Co-Founder, Full-Service Workers Alliance, Seattle,
Washington; and Ms. Saru Jayaraman, President, One Fair Wage,
New York, New York.
119TH CONGRESS
First Session--Hearing
On March 25, 2025, the Subcommittee on Workforce
Protections held a hearing entitled ``The Future of Wage Laws:
Assessing the FLSA's Effectiveness, Challenges, and
Opportunities,'' which included discussion of unworkable
regulations on tipped workers. Witnesses were Ms. Tammy
McCutchen, Senior Affiliate, Resolution Economics, New Market,
Tennessee; Ms. Paige Boughan, Senior Vice President and
Director of Human Resources, Farmers and Merchants Bank,
Hampstead, Maryland, on behalf of the Society for Human
Resource Management; Mr. Andrew Stettner, Director of Economy
and Jobs, The Century Foundation, Washington, D.C.; and Mr.
Jonathan Wolfson, Chief Legal Officer and Policy Director,
Cicero Institute, Richmond, Virginia.
First Session--Legislative Action
On March 24, 2025, Representative Womack introduced H.R.
2312, the Tipped Employee Protection Act of 2025, which was
referred to the Committee on Education and Workforce. On
November 20, 2025, the Committee considered H.R. 2312 in
legislative session. Representative Michael Baumgartner (R-WA)
offered an amendment in the nature of a substitute making
technical changes to the bill. The amendment was adopted by
voice vote. The Committee then reported the bill favorably, as
amended, to the House of Representatives by a recorded vote of
19 to 15.
Committee Views
INTRODUCTION
H.R. 2312, the Tipped Employee Protection Act of 2025,
replaces the outdated definition of tipped employee with a
simpler and more realistic definition that removes compliance
burdens for businesses and workers. Under the bill, anyone who
receives tips and other cash wages that together add up to the
federal minimum wage is defined as a tipped worker, without
regard to how much time he or she spends on specific tasks.
This bill is designed to eliminate confusing and harmful
federal requirements that are nearly impossible to enforce.
TIPPED WORKERS
According to the Internal Revenue Service, there are
roughly 6 million tipped workers nationwide, each of whom may
earn a base wage under the federal minimum wage of $7.25,
depending on state law.\1\ The Fair Labor Standards Act
(FLSA)--the primary federal statute outlining wage-and-hour
law--allows an employer to ``credit'' a portion of an
employee's tips toward the employer's obligation to pay the
federal minimum wage. Eligible employees may be paid less than
the federal minimum wage so long as each employee earns a
weekly average wage of at least the federal minimum wage when
base wages and tips are combined. Eligible tipped employees may
be paid a base wage of as low as $2.13 per hour.\2\
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\1\https://www.irs.gov/newsroom/treasury-irs-provide-guidance-for-
individuals-who-received-tips-or-overtime-during-tax-year-2025.
\2\https://www.dol.gov/agencies/whd/state/minimum-wage/tipped.
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States may set a higher base wage and minimum wage than
those required under the FLSA. For example, Washington state
requires all employees, regardless of whether the employee
receives tips, to be paid a minimum of $16.28 per hour plus
tips, while California requires $16 per hour plus tips.
Minnesota, Montana, Nevada, Oregon, and Alaska have also
prohibited employers' utilization of the tip credit to satisfy
the states' minimum wage laws.\3\
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\3\Id.
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80/20 TIMEKEEPING STANDARD
In 1988, The Department of Labor (DOL) revised its internal
Field Operations Handbook (Handbook) to clarify relevant
activities for tipped workers: (1) tip-producing work, (2)
activities related to tip-producing work, and (3) unrelated
activities.\4\ The Handbook indicated that an employer may not
take a tip credit for time spent on unrelated activities. For
one category of ``related activities,'' the employer could not
use the tip credit if an employee totals over 20 percent of a
workweek on related (i.e., non-direct) tip-producing work.\5\
The Handbook thus implemented the 80/20 standard for the first
time, whereby a tipped employee may not spend more than 20
percent of his or her time on nontipped tasks and for no more
than 30 minutes at a time.
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\4\Paul DeCamp & Kathleen A. Barrett, Federal Appeals Court Vacates
Department of Labor's ``80/20/30 Rule'' Regarding Tipped Employees,
Wage & Hour Defense Blog, Aug. 26, 2024, https://www.wagehourblog.com/
federal-appeals-court-vacates-department-of-labors-80-20-30-rule-
regarding-tipped-employees; DOL, Field Operations Handbook ch. 30
Sec. 30d (date last modified Dec. 20, 2012) (tips, tip credit, and
tipped employees), https://www.dol.gov/sites/dolgov/files/WHD/legacy/
files/FOH_Ch30.pdf.
\5\Paul DeCamp & Kathleen A. Barret, supra note 4.
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In 2007, a federal district court, for the first time,
allowed a claim to proceed past the summary judgment stage on
the basis of the 80/20 guidance.\6\ In 2009, DOL at the end of
the George W. Bush administration issued a rule to abandon the
80/20 guidance,\7\ but the Obama administration subsequently
restored the 80/20 guidance.
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\6\Id.
\7\https://www.dol.gov/sites/dolgov/files/WHD/legacy/files/
2009_01_16_23_FLSA.pdf.
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2020 TRUMP TIP RULE
On December 30, 2020, the first Trump administration DOL
published a final rule on tip regulations.\8\ Among other
regulatory changes, this rule prevented supervisors or managers
from keeping tips earned by employees except for services the
supervisor or manager directly provides to the customer. The
rule clarified the circumstances that an employer may claim the
tip credit when workers perform both tipped and non-tipped
duties. This rule also largely abandoned the 80/20 standard.
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\8\Tip Regulations Under the Fair Labor Standards Act, 85 Fed. Reg.
85,756 (Dec. 30, 2020).
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2021 BIDEN TIP RULE
In October 2021, the Biden DOL issued a final rule on
``dual jobs'' and tip regulations (2021 tip rule), which went
into effect in December 2021.\9\ Under the rule, DOL set
restrictions on the amount of time tipped employees could spend
performing work that is not ``tip-producing work'' and still be
paid at the reduced cash wage ($2.13 per hour) applicable to
tipped employees under the FLSA. The rule also limited
employers to utilizing the tip credit for the hours when an
employee is working on tip-producing activities or tasks that
directly support such activities, so long as the 80/20 standard
is followed. Under the 80/20 standard in the rule, employers
may not take a tip credit unless employees spend less than 30
continuous minutes on secondary duties that do not generate
tips. The rule also rolled back parts of the 2020 Trump
administration rule that aimed to provide more clarity and
flexibility to employers and to increase pay for back-of-the-
house workers such as cooks and dishwashers.\10\ The 2021 tip
rule was set aside by the U.S. Court of Appeals for the Fifth
Circuit in 2024.\11\
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\9\Tip Regulations Under the Fair Labor Standards Act (FLSA);
Partial Withdrawal, 86 Fed. Reg. 60,114 (Oct. 29, 2021).
\10\https://www.dol.gov/newsroom/releases/whd/whd20201222-3.
\11\Restaurant Law Center v. DOL, 2024 WL 3911308 (5th Cir. Aug.
23, 2024), https://www.ca5.uscourts.gov/opinions/pub/23/23-50562-
CV0.pdf.
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ENDING REGULATORY WHIPLASH
H.R. 2312, the Tipped Employee Protection Act, changes the
definition of a ``tipped employee'' from employees who
``customarily and regularly'' receive over $30 a month in tips
to employees who receive tips plus wages that meet or exceed
the minimum wage. Current reporting requirements for tipping
are confusing and burdensome for both workers and job creators.
While court interventions have temporarily provided relief to
businesses grappling with these burdens, H.R. 2312 clarifies
the issue in the FLSA and makes it easier for workers to earn
more by getting rid of unclear federal rules and regulations.
Among other problems, the 80/20 standard has been difficult to
enforce and essentially impossible to monitor for at least the
last 30 years.
At the March 25, 2025, Subcommittee on Workforce
Protections hearing, Mr. Jonathan Wolfson, former Assistant
Secretary for Policy at DOL, discussed in his testimony the
Tipped Employee Protection Act:
The Tipped Employee Protection Act clarifies that an
employer may pay a tipped wage to any worker whose
total wages and tips for a day, week, or pay period
exceeds the federal minimum wage. Under the FLSA, an
employer should be able to pay a tipped wage to any
worker who receives at least $30 per month in tips.
Rather than follow the letter of the statute, WHD has
developed a complicated scheme that requires employers
to track a tipped workers' time in minute detail, only
allowing employers to count certain activities as
``tipped work'' and requiring the employers to pay a
higher wage for all ``untipped work.''
Unfortunately, this means that businesses that employ
workers who earn tips are often caught in the
crosshairs of WHD investigations not because they
violate the letter of the statute, nor because their
workers are paid less than the federal minimum wage per
hour, but because they neglect to pay their workers a
higher wage for portions of an hour when the tipped
worker is engaged in a task the bureaucrats at DOL do
not consider to be ``tipped work.''
This bill removes the outdated $30 threshold and
uproots the tedious tracking requirements in DOL
regulations by simply clarifying that a worker who
receives tips and other wages must earn at least the
federal minimum wage for all hours worked. This simple
change will save compliance costs and numerous
headaches for businesses and still ensure that tipped
workers receive the wages they deserve.\12\
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\12\https://edworkforce.house.gov/uploadedfiles/
wolfson_testimony.pdf (p. 6).
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CONCLUSION
H.R. 2312 allows restaurants and other industries that rely
on tipped workers to have predictability when making business
decisions. The bill also helps employees bring home higher
paychecks, and it reduces compliance costs that could threaten
their jobs. Under the bill, states may still set higher minimum
wages, than the FLSA, including for tipped workers.\13\
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\13\https://womack.house.gov/news/
documentsingle.aspx?DocumentID=407036.
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H.R. 2312 Section-by-Section Summary
Section 1 identifies the bill's short title as the ``Tipped
Employee Protection Act.''
Section 2 strikes FLSA section 3(t) defining a ``tipped
employee'' as ``any employee engaged in an occupation in which
he customarily and regularly receives more than $30 a month in
tips.'' Section 2 replaces this definition in FLSA section 3(t)
so that a tipped employee is any employee, without regard to
the duties of the employee, who receives tips and other cash
wages for a work period at a rate that, when combined with the
cash wage required under the FLSA's definition of ``wage,'' is
not less than the FLSA minimum wage. Section 2 also specifies
that a work period is at the discretion of the employer, such
as one day, one week, every two weeks, every 28 days, or every
pay period.
Explanation of Amendments
The amendment in the nature of a substitute is explained in
the body of this report.
Application of Law to the Legislative Branch
H.R. 2312 amends the Fair Labor Standards Act to revise the
definition of ``tipped employee,'' including for eligible
employees of the legislative branch under the Congressional
Accountability Act.
Unfunded Mandate Statement
Pursuant to Section 423 of the Congressional Budget and
Impoundment Control Act of 1974, Pub. L. No. 93-344 (as amended
by Section 101(a)(2) of the Unfunded Mandates Reform Act of
1995, Pub. L. No. 104-4), the Committee traditionally adopts as
its own the cost estimate prepared by the Director of the
Congressional Budget Office (CBO) pursuant to section 402 of
the Congressional Budget and Impoundment Control Act of 1974.
The Committee reports that because this cost estimate was not
timely submitted to the Committee before the filing of this
report, the Committee is not in a position to make a cost
estimate for H.R. 2312.
Earmark Statement
H.R. 2312 does not contain any congressional earmarks,
limited tax benefits, or limited tariff benefits as defined in
clause 9 of House rule XXI.
Roll Call Votes
Clause 3(b) of rule XIII of the Rules of the House of
Representatives requires the Committee Report to include for
each record vote on a motion to report the measure or matter
and on any amendments offered to the measure or matter the
total number of votes for and against and the names of the
Members voting for and against.
Statement of General Performance Goals and Objectives
In accordance with clause (3)(c) of House of
Representatives rule XIII, the goal of H.R. 2312, the Tipped
Employee Protection Act, is to amend the Fair Labor Standards
Act to revise the definition of ``tipped employee.''
Duplication of Federal Programs
No provision of H.R. 2312 establishes or reauthorizes a
program of the Federal Government known to be duplicative of
another Federal program, a program that was included in any
report from the Government Accountability Office to Congress
pursuant to section 21 of Public Law 111-139, or a program
related to a program identified in the most recent Catalog of
Federal Domestic Assistance.
Statement of Oversight Findings and Recommendations of the Committee
In compliance with clause 3(c)(1) of rule XIII and clause
2(b)(1) of rule X of the Rules of the House of Representatives,
the Committee's oversight findings and recommendations are
reflected in the body of this report.
Required Committee Hearing
In compliance with clause 3(c)(6) of rule XIII of the Rules
of the House of Representatives the following hearing held
during the 119th Congress was used to develop or consider H.R.
2312: On March 25, 2025, the Subcommittee on Workforce
Protections held a hearing on ``The Future of Wage Laws:
Assessing the FLSA's Effectiveness, Challenges, and
Opportunities.''
New Budget Authority and CBO Cost Estimate
With respect to the requirements of clause 3(c)(2) of rule
XIII of the Rules of the House of Representatives and section
308(a) of the Congressional Budget Act of 1974 and with respect
to requirements of clause 3(c)(3) of rule XIII of the Rules of
the House of Representatives and section 402 of the
Congressional Budget Act of 1974, a cost estimate was not made
available to the Committee in time for the filing of this
report. The Chairman of the Committee shall cause such estimate
to be printed in the Congressional Record upon its receipt by
the Committee.
Committee Cost Estimate
Clause 3(d)(1) of rule XIII of the Rules of the House of
Representatives requires an estimate and a comparison of the
costs that would be incurred in carrying out H.R. 2312.
However, clause 3(d)(2)(B) of that rule provides that this
requirement does not apply when, as with the present report,
the Committee has requested a cost estimate for the bill from
the Director of the Congressional Budget Office.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italics, and existing law in which no
change is proposed is shown in roman):
FAIR LABOR STANDARDS ACT OF 1938
* * * * * * *
definitions
Sec. 3. As used in this Act--
(a) ``Person'' means an individual, partnership, association,
corporation, business trust, legal representative, or any
organized group of persons.
(b) ``Commerce'' means trade, commerce, transportation,
transmission, or communication among the several States or
between any State and any place outside thereof.
(c) ``State'' means any State of the United States or the
District of Columbia or any Territory or possession of the
United States.
(d) ``Employer'' includes any person acting directly or
indirectly in the interest of an employer in relation to an
employee and includes a public agency, but does not include any
labor organization (other than when acting as an employer) or
anyone acting in the capacity of officer or agent of such labor
organization.
(e)(1) Except as provided in paragraphs (2), (3), and (4),
the term ``employee'' means any individual employed by an
employer.
(2) In the case of an individual employed by a public agency,
such term means--
(A) any individual employed by the Government of the
United States--
(i) as a civilian in the military departments
(as defined in section 102 of title 5, United
States Code),
(ii) in any executive agency (as defined in
section 105 of such title),
(iii) in any unit of the judicial branch of
the Government which has positions in the
competitive service,
(iv) in a nonappropriated fund
instrumentality under the jurisdiction of the
Armed Forces,
(v) in the Library of Congress, or
(vi) the Government Printing Office;
(B) any individual employed by the United States
Postal Service or the Postal Rate Commission; and
(C) any individual employed by a State, political
subdivision of a State, or an interstate governmental
agency, other than such an individual--
(i) who is not subject to the civil service
laws of the State, political subdivision, or
agency which employs him; and
(ii) who--
(I) holds a public elective office of
that State, political subdivision, or
agency,
(II) is selected by the holder of
such an office to be a member of his
personal staff,
(III) is appointed by such an
officeholder to serve on a policymaking
level,
(IV) is an immediate adviser to such
an officeholder with respect to the
constitutional or legal powers of his
office, or
(V) is an employee in the legislative
branch or legislative body of that
State, political subdivision, or agency
and is not employed by the legislative
library of such State, political
subdivision, or agency.
(3) For purposes of subsection (u), such term does not
include any individual employed by an employer engaged in
agriculture if such individual is the parent, spouse, child, or
other member of the employer's immediate family.
(4)(A) The term ``employee'' does not include any individual
who volunteers to perform services for a public agency which is
a State, a political subdivision of a State, or an interstate
governmental agency, if--
(i) the individual receives no compensation or is
paid expenses, reasonable benefits, or a nominal fee to
perform the services for which the individual
volunteered; and
(ii) such services are not the same type of services
which the individual is employed to perform for such
public agency.
(B) An employee of a public agency which is a State,
political subdivision of a State, or an interstate governmental
agency may volunteer to perform services for any other State,
political subdivision, or interstate governmental agency,
including a State, political subdivision or agency with which
the employing State, political subdivision, or agency has a
mutual aid agreement.
(5) The term ``employee'' does not include individuals who
volunteer their services solely for humanitarian purposes to
private non-profit food banks and who receive from the food
banks groceries.
(f) ``Agriculture'' includes farming in all its branches and
among other things includes the cultivation and tillage of the
soil, dairying, the production, cultivation, growing, and
harvesting of any agricultural or horticultural commodities
(including commodities defined as agricultural commodities in
section 15(g) of the Agricultural Marketing Act, as amended),
the raising of livestock, bees, fur-bearing animals, or
poultry, and any practices (including any forestry or lumbering
operations) performed by a farmer or on a farm as an incident
to or in conjunction with such farming operations, including
preparation for market, delivery to storage or to market or to
carriers for transportation to market.
(g) ``Employ'' includes to suffer or permit to work.
(h) ``Industry'' means a trade, business, industry, or other
activity, or branch or group thereof, in which individuals are
gainfully employed.
(i) ``Goods'' means goods (including ships and marine
equipment), wares, products, commodities, merchandise, or
articles or subjects of commerce of any character, or any part
or ingredient thereof, but does not include goods after their
delivery into the actual physical possession of the ultimate
consumer thereof other than a producer, manufacturer, or
processor thereof.
(j) ``Producer'' means produced, manufactured, mined,
handled, or in any manner worked on in any State; and for the
purposes of this Act an employee shall be deemed to have been
engaged in the production of goods if such employee was
employed in producing, manufacturing, mining, handling,
transporting, or in any other manner working on such goods, or
in any closely related process or occupation directly essential
to the production thereof, in any State.
(k) ``Sale'' or ``sell'' includes any sale, exchange,
contract to sell, consignment for sale, shipment for sale, or
other disposition.
(l) ``Oppressive child labor'' means a condition of
employment under which (1) any employee under the age of
sixteen years is employed by an employer (other than a parent
or a person standing in place of a parent employing his own
child or a child in his custody under the age of sixteen years
in an occupation other than manufacturing or mining or an
occupation found by the Secretary of Labor to be particularly
hazardous for the employment of children between the ages of
sixteen and eighteen years or detrimental to their health or
well-being) in any occupation, or (2) any employee between the
ages of sixteen and eighteen years is employed by an employer
in any occupation which the Secretary of Labor shall find and
by order declare to be particularly hazardous for the
employment of children between such ages or detrimental to
their health or well-being; but oppressive child labor shall
not be deemed to exist by virture of the employment in any
occupation of any person with respect to whom the employer
shall have on file an unexpired certificate issued and held
pursuant to regulations of the Secretary of Labor certifying
that such person is above the oppressive child labor age. The
Secretary of Labor shall provide by regulation or by order that
the employment of employees between the ages of fourteen and
sixteen years in occupations other than manufacturing and
mining shall not be deemed to constitute oppressive child labor
if and to the extent that the Secretary of Labor determines
that such employment is confined to periods which will not
interfere with their schooling and to conditions which will not
interfere with their health and well-being.
(m)(1) ``Wage'' paid to any employee includes the reasonable
cost, as determined by the Secretary of Labor, to the employer
of furnishing such employee with board, lodging, or other
facilities, if such board, lodging, or other facilities are
customarily furnished by such employer to his employees:
Provided, That the cost of board, lodging, or other facilities
shall not be included as a part of the wage paid to any
employee to the extent it is excluded therefrom under the terms
of a bona fide collective-bargaining agreement applicable to
the particular employee: Provided further, That the Secretary
is authorized to determine the fair value of such board,
lodging, or other facilities for defined classes of employees
and in defined areas, based on average cost to the employer or
to groups of employers similarly situated, or average value to
groups of employees, or other appropriate measures of fair
value. Such evaluations, where applicable and pertinent, shall
be used in lieu of actual measure of cost in determining the
wage paid to any employee.
(2)(A) In determining the wage an employer is required to pay
a tipped employee, the amount paid such employee by the
employee's employer shall be an amount equal to--
(i) the cash wage paid such employee which for
purposes of such determination shall be not less than
the cash wage required to be paid such an employee on
the date of the enactment of this paragraph; and
(ii) an additional amount on account of the tips
received by such employee which amount is equal to the
difference between the wage specified in clause (i) and
the wage in effect under section 6(a)(1).
The additional amount on account of tips may not exceed the
value of the tips actually received by an employee. The
preceding 2 sentences shall not apply with respect to any
tipped employee unless such employee has been informed by the
employer of the provisions of this subsection, and all tips
received by such employee have been retained by the employee,
except that this subsection shall not be construed to prohibit
the pooling of tips among employees who customarily and
regularly receive tips.
(B) An employer may not keep tips received by its employees
for any purposes, including allowing managers or supervisors to
keep any portion of employees' tips, regardless of whether or
not the employer takes a tip credit.
(n) ``Resale'' shall not include the sale of goods to be used
in residential or farm building construction, repair, or
maintenance: Provided, That the sale is recognized as a bona
fide retail sale in the industry.
(o) Hours Worked.--In determining for the purposes of
sections 6 and 7 the hours for which an employee is employed,
there shall be excluded any time spent in changing clothes or
washing at the beginning or end of each workday which was
excluded from measured working time during the week involved by
the express terms of or by custom or practice under a bona fide
collective-bargaining agreement applicable to the particular
employee.
(p) ``American vessel'' includes any vessel which is
documented or numbered under the laws of the United States.
(q) ``Secretary'' means the Secretary of Labor.
(r)(1) ``Enterprise'' means the related activities performed
(either through unified operation or common control) by any
person or persons for a common business purpose, and includes
all such activities whether performed in one or more
establishments or by one or more corporate or other
organizational units including departments of an establishment
operated through leasing arrangements, but shall not include
the related activities performed for such enterprise by an
independent contractor. Within the meaning of this subsection,
a retail or service establishment which is under independent
ownership shall not be deemed to be so operated or controlled
as to be other than a separate and distinct enterprise by
reason of any arrangement, which includes, but is not
necessarily limited to, an agreement, (A) that it will sell, or
sell only, certain goods specified by a particular
manufacturer, distributor, or advertiser, or (B) that it will
join with other such establishments in the same industry for
the purpose of collective purchasing, or (C) that it will have
the exclusive rights to sell the goods or use the brand name of
a manufacturer, distributor, or advertiser within a specified
area, or by reason of the fact that it occupies premises leased
to it by a person who also leases premises to other retail or
service establishments.
(2) For purposes of paragraph (1), the activities performed
by any person or persons--
(A) in connection with the operation of a hospital,
an institution primarily engaged in the care of the
sick, the aged, the mentally ill or defective who
reside on the premises of such institution, a school
for mentally or physicially handicapped or gifted
children, a preschool, elementary or secondary school,
or an institution of higher education (regardless of
whether or not such hospital, institution, or school is
operated for profit or not for profit), or
(B) in connection with the operation of a street,
suburban or interurban electric railway, or local
trolley or motorbus carrier, if the rates and services
of such railway or carrier are subject to regulation by
a State or local agency (regardless of whether or not
such railway or carrier is public or private or
operated for profit or not for profit), or
(C) in connection with the activities of a public
agency.
shall be deemed to be activities performed for a business
purpose.
(s)(1) ``Enterprise engaged in commerce or in the production
of goods for commerce'' means an enterprise that--
(A)(i) has employees engaged in commerce or in the
production of goods for commerce, or that has employees
handling, selling, or otherwise working on goods or
materials that have been moved in or produced for
commerce by any person; and
(ii) is an enterprise whose annual gross volume of
sales made or business done is not less than $500,000
(exclusive of excise taxes at the retail level that are
separately stated);
(B) is engaged in the operation of a hospital, an
institution primarily engaged in the care of the sick,
the aged, or the mentally ill or defective who reside
on the premises of such institution, a school for
mentally or physically handicapped or gifted children,
a preschool, elementary or secondary school, or an
institution of higher education (regardless of whether
or not such hospital, institution, or school is public
or private or operated for profit or not for profit);
or
(C) is an activity of a public agency.
(2) Any establishment that has as its only regular employees
the owner thereof or the parent, spouse, child, or other member
of the immediate family of such owner shall not be considered
to be an enterprise engaged in commerce or in the production of
goods for commerce or a part of such an enterprise. The sales
of such an establishment shall not be included for the purpose
of determining the annual gross volume of sales of any
enterprise for the purpose of this subsection.
[(t)] (t)(1) ``Tipped employee'' means any employee [engaged
in an occupation in which he customarily and regularly receives
more than $30 a month in tips.], without regard to the duties
of the employee, who receives tips and other cash wages for a
work period described in paragraph (2) at a rate that, when
combined with the cash wage required under subsection
(m)(2)(A)(i), is not less than the wage in effect under section
6(a)(1).
(2) A work period described in this paragraph is a work
period that is determined by the employer of the employee, such
as a work period of 1 day, 1 week, every 2 weeks, every 28
days, or every pay period.
(u) ``Man-day'' means any day during which an employee
performs any agricultural labor for not less than one hour.
(v) ``Elementary school'' means a day or residential school
which provides elementary education, as determined under State
law.
(w) ``Secondary school'' means a day or residential school
which provides secondary education, as determined under State
law.
(x) ``Public agency'' means the Government of the United
States; the government of a State or political subdivision
thereof; any agency of the United States (including the United
States Postal Service and Postal Rate Commission), a State, or
a political subdivision of a State; or any interstate
governmental agency.
(y) ``Employee in fire protection activities'' means an
employee, including a firefighter, paramedic, emergency medical
technician, rescue worker, ambulance personnel, or hazardous
materials worker, who--
(1) is trained in fire suppression, has the legal
authority and responsibility to engage in fire
suppression, and is employed by a fire department of a
municipality, county, fire district, or State; and
(2) is engaged in the prevention, control, and
extinguishment of fires or response to emergency
situations where life, property, or the environment is
at risk.
* * * * * * *
MINORITY VIEWS
INTRODUCTION
H.R. 2312, the Tipped Employees Protection Act (TEPA),
would amend federal minimum wage and overtime law with regard
to tipped employees, whose tips can be counted as part of their
wage, by broadening the definition of tipped employee and
increasing employers' power to move workers in and out of
tipped employee status. The bill would create more instability
and unpredictability for low-wage workers throughout the
economy. The bill is opposed by the AFL-CIO, Center for Law and
Social Policy, and Economic Policy Institute.
BACKGROUND
Underlying Law
The Fair Labor Standards Act of 1938 (FLSA) is the core
federal workplace standards law governing the minimum wage,
overtime, oppressive child labor, and other fundamental
workplace standards.\1\ FLSA includes many exemptions\2\ and
special provisions for particular workplaces.\3\
---------------------------------------------------------------------------
\1\Pub. L. No. 75-718, 52 Stat. 1060 (1938) (codified at 29 U.S.C.
Sec. 201 et seq.).
\2\See, e.g., id. Sec. Sec. 13(a)(1) (minimum wage and overtime
exemption for bona fide executive, administrative, and professional
employees), 13(b) (overtime exemption for interstate transportation
workers).
\3\See, e.g., id. Sec. Sec. 7(j) (permitting hospital and care
facilities to apply overtime on a 14-day rather than seven-day work
period), 14(c) (authorizing subminimum wages for workers with
disabilities in sheltered workshops).
---------------------------------------------------------------------------
Among the workplace arrangements given special
consideration in FLSA is tipped work. As first passed in 1938,
the FLSA did not reference tips or tipped workers,\4\ and
``retail and service establishments,''\5\ in which there are
many tipped workers, were not covered under the statute.\6\ In
1942, the Supreme Court held in Williams v. Jacksonville
Terminal Co.\7\ that an employer could count an employee's tips
as a credit against the employer's full obligation to pay the
minimum wage.\8\
---------------------------------------------------------------------------
\4\Fair Labor Standards Act of 1938, Pub. L. No. 75-718, 52 Stat.
1060 (1938) (codified as amended at 29 U.S.C. Sec. 201 et seq.).
\5\Id.
\6\Id.
\7\315 U.S. 386 (1942).
\8\Id. at 407.
---------------------------------------------------------------------------
Congress eventually brought tipped work into FLSA coverage.
The 1966 FLSA amendments expanded coverage to hotels and
restaurants and limited the employer's use of the tip credit to
50 percent of the minimum wage at that time.\9\ The 1974
amendments added that an employer may take a tip credit for an
employee only if ``such employee has been informed by the
employer of the provisions of this subsection, and all tips
received by such employee have been retained by the
employee.''\10\
---------------------------------------------------------------------------
\9\Fair Labor Standards Amendments of 1966, Pub. L. No. 89-601, 80
Stat. 830 (1966).
\10\Fair Labor Standards Amendments of 1974, Public Law 93-259,
Sec. 13(e), 88 Stat. 55 (1974).
---------------------------------------------------------------------------
In the aftermath of these and subsequent amendments, a
tipped employee--someone who is engaged in an occupation in
which he regularly and customarily earns at least $30 a month
in tips\11\--is eligible for a version of the minimum wage in
which the tips count toward the wage. The employer must pay at
least $2.13 per hour (but may pay more) and may apply the
tipped worker's tips to make up the difference between the base
pay and the minimum wage (currently $7.25).\12\ If the tips
earned in a workweek do not sufficiently cover that difference,
the employer is required to increase the amount paid
accordingly.\13\ Employers may not otherwise keep tips for
their own use or to compensate managers,\14\ but they may
organize tip pools for distributing tips among employees who
customarily and regularly receive tips.\15\
---------------------------------------------------------------------------
\11\29 U.S.C. Sec. 203 (t).
\12\Id. at (m)(2)(A).
\13\Id.
\14\Id. at (m)(2)(B).
\15\Id. at (m)(2)(A).
---------------------------------------------------------------------------
Dual Jobs
Policy determining the extent to which tipped employees can
be engaged in work that does not produce tips (such as a
restaurant server who spends time rolling silverware into
napkins, or a hotel employee who spends some time as a bellhop
and some as a maintenance engineer) has been a merry-go-round
of guidance and rules as a recent legal opinion attests:
In 1967[,] DOL issued its ``dual-jobs'' regulation,
which addressed situations where an employee regularly
engages in distinct occupations for the same employer.
For example, ``where a maintenance man in a hotel also
serves as a waiter,'' that employee ``is a tipped
employee only with respect to his employment as a
waiter. He is employed in two occupations.'' The
regulation contrasted this example with that of ``a
waitress who spends part of her time cleaning and
setting tables, toasting bread, making coffee and
occasionally washing dishes or glasses.'' For the
latter employee, ``[s]uch related duties in an
occupation that is a tipped occupation need not by
themselves be directed toward producing tips.''
Presumably concerned that employers might exploit the
tip credit to ``subsidize non-tipped work and pay
employees less across the board,'' DOL issued several
opinion letters from 1979 to 1985 interpreting the
dual-jobs regulation to more significantly restrict the
tip credit's availability. In 1988, DOL published its
so-called 80/20 guidance in its sub-regulatory Field
Operations Handbook. The 80/20 guidance provided that a
maximum of 20 percent of an employee's time could be
spent on non-tipped activities related to the tipped
occupation--for example, a waitress setting tables or
making coffee--for the employer to claim the full tip
credit.
DOL's 80/20 guidance persisted uninterrupted until
2009, when DOL's interpretation of the dual-jobs
regulation began to oscillate with every change in
presidential administration. First, in early 2009, a
DOL opinion letter briefly rescinded the guidance. This
opinion letter, in turn, was quickly withdrawn in the
early days of the Obama Administration. Then, in 2018,
the Trump Administration reissued the 2009 opinion
letter, thereby doing away with the 80/20 guidance once
again. And in 2020, DOL issued a final rule set to take
effect in March 2021 that would have . . . permitted
employers to claim the tip credit for all non-tipped
duties that its tipped employees performed, so long as
those duties were related to the employee's tipped
occupation and were performed reasonably
contemporaneously with tipped duties. But the rule
never took effect.
Instead, another change in presidential
administration swept in another change in DOL policy.
In December 2021, DOL issued a different final rule
after notice and comment that effectively codified its
longstanding 80/20 guidance.\16\
\16\Rest. L. Ctr. v. U.S. Dep't of Lab., 120 F.4th 163, 166-67 (5th
Cir. 2024) (internal citations omitted).
---------------------------------------------------------------------------
The Biden Administration's 2021 rule did not, however,
survive court scrutiny. The U.S. Court of Appeals for the Fifth
Circuit, newly empowered by the Supreme Court's Loper Bright
decision\17\ to construe FLSA without deferring to DOL's
interpretation of it, concluded that the rule was arbitrary and
capricious and was not supported by FLSA.\18\
---------------------------------------------------------------------------
\17\Loper Bright Enters. v. Raimondo, 603 U.S. 369 (2024).
\18\120 F.4th at 404-09.
---------------------------------------------------------------------------
Although the 80/20 clarification is now null and void, in
their decision the Fifth Circuit did not strike down the
longstanding dual jobs rule.\19\ As a result, an employee who
works for an employer in more than one distinct occupation--
such as a hotel employee who spends some hours as a maintenance
engineer and others as a tip-earning bellhop--is entitled to
the full minimum wage for time spent in the non-tipped
occupation, while the tipped credit rules may apply to the time
spent in the tip-earning occupation.
---------------------------------------------------------------------------
\19\Id. at 407.
---------------------------------------------------------------------------
Tipped Work and Precarity
Any policy change with respect to tipped work will be felt
throughout the economy. There are estimated to be roughly four
million tipped workers in the United States.\20\ The tipped
workforce is nearly two-thirds female, disproportionately
composed of women of color, and disproportionately made up of
single parents.\21\ Most tipped workers are employed in food
service,\22\ but tipped workers also include manicurists, hair
dressers, and bartenders, among other jobs.\23\ Geographically,
four out of every 11 tipped employees nationwide work in the
South, where tipping became popular after the Civil War as a
means to deny formerly enslaved Black workers relegated to
service jobs an hourly wage.\24\
---------------------------------------------------------------------------
\20\Low Wage Workforce Tracker, Econ. Pol'y Inst., https://
www.epi.org/low-wage-workforce/ (last visited Nov. 18, 2025).
\21\Nina Mast, Tipping Is a Racist Relic and a Modern Tool of
Economic Oppression in the South, Econ. Pol'y Inst. (June 18, 2024),
https://www.epi.org/publication/rooted-racism-
tipping/.
\22\Sylvia Allegretto & David Cooper, Twenty-Three Years and Still
Waiting for Change: Why It's Time to Give Tipped Workers the Regular
Minimum Wage, Econ. Pol'y Inst. (July 10, 2014), https://www.epi.org/
publication/waiting-for-change-tipped-minimum-wage/.
\23\Justin Schweitzer, Ending the Tipped Minimum Wage Will Reduce
Poverty and Inequality: One Fair Wage States Are Better for Workers in
Tipped Industries, Ctr. for Amer. Progress (Mar. 30, 2021), https://
www.americanprogress.org/article/ending-tipped-minimum-wage-will-
reduce-poverty-inequality/.
\24\Mast, supra note 21.
---------------------------------------------------------------------------
Tipped work is associated with low wages and deficient
benefits. The typical tipped worker was paid an estimated
$15.81 per hour in recent years, less than two-thirds the
hourly wage of the typical worker in the economy overall who
was paid roughly $24.95 per hour over the same time span,
according to a recent analysis by the Economic Policy Institute
(EPI).\25\ Not surprisingly, tipped workers are more likely to
live in poverty. An estimated 11.3 percent of tipped workers
live in poverty, relative to 4.9 percent of non-tipped
workers.\26\ Beyond wages, tipped workers are also less likely
to have access to benefits such as paid sick leave, health
care, short-term disability, life insurance, and paid
vacation.\27\
---------------------------------------------------------------------------
\25\Id.
\26\Id.
\27\Id.
---------------------------------------------------------------------------
In addition, wage theft, which costs workers billions every
year, disproportionately impacts tipped workers.\28\ Although
tipped workers are legally owed the full minimum wage by their
employer, if their tips fail to make up the difference between
the tipped minimum wage of $2.13 and the full minimum wage,
workers are often responsible for confronting their employer
for this difference (often referred to as a ``tip credit'') and
keeping detailed logs of their hours and earnings to detect
abnormalities in the paychecks.\29\ In recent years, the
importance of the tip credit has increased as states have
increased state regular minimum wages without complimentarily
adjusting the tipped minimum wage, leaving tipped workers in
those states vulnerable to having that larger ``tip credit''
pocketed by unscrupulous employers.\30\ Without sufficient
funding for worker protection agencies, unscrupulous employers
can retaliate against workers with impunity if workers attempt
to call out wage theft or organize with other workers to push
back against employers who pocket tips.\31\
---------------------------------------------------------------------------
\28\David Cooper & Teresa Kroeger, Employers Steal Billions from
Workers' Paychecks Each Year: Survey Data Show Millions of Workers Are
Paid Less Than the Minimum Wage, at Significant Cost to Taxpayers and
State Economies, Econ. Pol'y Inst. (May 10, 2017), https://www.epi.org/
publication/employers-steal-billions-from-workers-paychecks-each-year.
\29\Sylvia Allegretto, Customer Tips Are Providing the Lion's Share
of Wages to Tipped Workers, Ctr. for Econ. & Pol'y Rsch. (Mar. 27,
2024), https://www.cepr.net/report/customer-tips-provide-lion-share-of-
wages-to-tipped-workers/.
\30\Id.
\31\Emnet Getahun, Which Costs More: Shoplifting or Wage Theft? The
Answer Might Surprise You, Econ. Opportunity Inst. (Jan. 17, 2024),
https://www.opportunityinstitute.org/blog/post/organized-retail-theft-
wage-theft/.
---------------------------------------------------------------------------
Because tipped workers are disproportionately female,
policy changes impacting tipped workers also disproportionately
impact female workers. For example, the Trump Administration
proposed a rule on December 5, 2017, that would have allowed
employers to legally pocket the tips earned by the workers they
employ, which could have led to employers pocketing as much as
$5.8 billion in tips earned by workers each year.\32\ An
estimated $4.6 billion (79%) of those stolen tips would have
otherwise gone to female workers, if the ``tip-stealing'' rule
had been finalized.\33\
---------------------------------------------------------------------------
\32\Heidi Shierholz et al., Employers Would Pocket $5.8 Billion of
Workers' Tips Under Trump Administration's Proposed `Tip Stealing'
Rule, Econ. Pol'y Inst. (Dec. 12, 2017), https://www.epi.org/
publication/employers-would-pocket-workers-tips-under-trump-
administrations-
proposed-tip-stealing-rule/.
\33\Heidi Shierholz et al., Women Would Lose $4.6 Billion in Earned
Tips if the Administration's `Tip Stealing' Rule Is Finalized, Econ.
Pol'y Inst. (Dec. 17, 2018), https://www.epi.org/publication/women-
would-lose-4-6-billion-in-earned-tips-if-the-administrations-tip-
stealing-rule-is-finalized-overall-tipped-workers-would-lose-5-8-
billion/.
---------------------------------------------------------------------------
Critics of eliminating the tipped minimum wage often
suggest that the restaurant industry will not be able to
increase prices to pay tipped workers the full regular minimum
wage, suggesting that restaurants will have to lay off staff.
Research suggests that where the tipped minimum wage has been
eliminated, there has not been a significant effect on
employment in full-service restaurants.\34\
---------------------------------------------------------------------------
\34\Sylvia Allegretto & Carl Nadler, Tipped Wage Effects on
Earnings and Employment in Full-Service Restaurants, 54 Indus. Rels.
622 (2015).
---------------------------------------------------------------------------
SHORTCOMINGS OF THE LEGISLATION
H.R. 2312 proposes a small amendment with significant
consequences. It would amend section 3(t) of FLSA, which
defines ``tipped employee,'' as follows:
Current Law Amended
``Tipped employee'' means any employee (1) ``Tipped employee''
engaged in an occupation in which he means any employee, without
customarily and regularly receives more regard to the duties of the
than $30 a month in tips.. employee, who receives tips
and other cash wages for a
period described in
paragraph (2) at a rate
that when combined with the
[required $2.13 subminimum]
is greater than or equal to
the [minimum wage].
(2) The period described in
this paragraph may be (as
determined by the employer)
a period of 1 day, 1 week,
every other week, every pay
period, or 1 month.
In this one short provision,\35\ the bill would make three
significant changes to FLSA's current treatment of tipped work:
---------------------------------------------------------------------------
\35\H.R. 2312, Sec. 2, 119th Cong. (2025) [hereinafter TEPA].
---------------------------------------------------------------------------
(1) It would drop the limitation of tip credit rules
to employees who regularly and customarily receive
significant tips.
(2) It would undermine the dual jobs rules protecting
workers who alternate time in distinct tip-producing
and non-tipped occupations.
(3) It would empower employers to arbitrarily
reclassify workers as tipped or non-tipped employees
during any time period ranging from one month to a
single day.
Taken together, these changes would empower employers to
pocket money earned by their employees, make earnings less
predictable for many workers, and apply the tipped credit to
workers currently covered by the standard minimum wage
protections.
Affecting Irregular and Intermittent Tips
Workers who receive tips only occasionally and
intermittently would be at risk of losing income. Take, for
example, hotel housekeepers. A recent TD Ameritrade survey of
tipping culture in America found that only 35 percent of
respondents reported tipping hotel workers.\36\ Other research
has likewise found low rates of tipping for housekeepers.\37\
Under current law, a hotel housekeeper who does not regularly
receive tips of at least $30 per month would be exempt from the
tip credit rules, and any tips earned would in effect be an
occasional boost to her pay. Between the bill's extension of
the tipped worker definition to intermittent tip earners and
the flexibility it gives an employer to apply the tip credit
for any period of working time, H.R. 2312 would empower her
employer to lay claim to her tips by crediting them to her
wage, even if she only earned tips for a single day in a month.
---------------------------------------------------------------------------
\36\Christopher Zara, A Shocking Percentage of Restaurant Patrons
Say They Don't Leave Tips for Waitstaff, Fast Company (Feb. 6, 2020),
https://www.fastcompany.com/90460928/a-shocking-percentage-of-
restaurant-patrons-say-they-dont-leave-tips-for-wait-staff.
\37\Tammy La Gorce, Tipping May Be the Norm, but Not for Hotel
Housekeepers, N.Y. Times (Oct. 30, 2017), https://www.nytimes.com/2017/
10/30/business/hotel-housekeeper-tipping.html.
---------------------------------------------------------------------------
Many service workers who do not receive tips on a regular
basis are offered special tips during the end-of-year
holidays.\38\ For example, the famed etiquette advice of Emily
Post recommends a tip of up to one week's pay for an au pair or
live-in nanny; $25-70 for each day care center staff member who
works with a given child; and $10-30 for a garage
attendant.\39\ H.R. 2312 would empower employers to exploit
their customers' holiday generosity by converting their
employees to tipped employee status during the expected holiday
tipping season, slash their wage to the $2.13 subminimum wage,
and pay more only if the tips fail to bring the workers up to
the full minimum wage. What would be a welcome holiday gift
under current law would, under this bill, be just part of the
workers' wages.
---------------------------------------------------------------------------
\38\Brian Vines, CR's Holiday Tipping Cheat Sheet, Consumer Reports
(Nov. 8, 2025), https://www.consumerreports.org/money/tipping/tipping-
during-holiday-season-how-much-to-tip-a1159032398/.
\39\Holiday Tipping Guide, Emily Post Etiquette, https://
emilypost.com/advice/holiday-
tipping-guide (last visited Nov. 19, 2025).
---------------------------------------------------------------------------
Perverse Incentives
H.R. 2312 would also incentivize employers to exploit the
tip credit to lower wages in jobs that never earn tips. By
rendering an employee's duties irrelevant to the applicability
of the tip credit, the bill would encourage employers to hire
workers into hybrid jobs with time spent in both tip-earning
and non-tip-earning occupations.
For example, a restaurant could hire an employee as a line
cook with occasional shifts as a waiter. Under the dual jobs
rule, the restaurant would be required to pay at least the full
minimum wage for the employee's line cook shifts and could
elect the tip credit only for any shifts as a server. Under
this bill, by contrast, the employer could disregard the
employee's duties and apply the tip credit across the entire
amount of time the employee works, not just the table service
shifts.
Power Over Time
The bill also contains a confusing provision empowering
employers to decide who is a tipped employee for any period of
time, from one day to an entire month.
Current law governing tipped employees refers to two time
periods, which are applied for different purposes:
(1) The current FLSA definition of tipped employee
refers to a typical month. The relevant provision,
referring to an employee who ``customarily and
regularly receives more than $30 a month in tips,''\40\
in essence identifies which employees may be paid in
accordance with the tip credit rules. It is
categorical: if an employee does not meet the
definition, then an employer cannot opt to take
advantage of occasional, irregular, or typically low
tips to satisfy the minimum wage or overtime
obligations of FLSA.\41\
---------------------------------------------------------------------------
\40\FLSA Sec. 3(t) (emphasis added).
\41\29 C.F.R. Sec. 531.56(a) (``An employee employed . . . in an
occupation in which he or she does not receive more than $30 a month in
tips customarily and regularly is not a `tipped employee' within the
meaning of the Act and must receive the full compensation required by
the provisions of the Act in cash or allowable facilities without any
deduction for tips received under the provisions of section
3(m)(2)(A).''); id. Sec. 531.57 (``[A]n employee who only occasionally
or sporadically receives tips totaling more than $30 a month, such as
at Christmas or New Years when customers may be more generous than
usual, will not be deemed a tipped employee.'').
---------------------------------------------------------------------------
(2) FLSA's minimum wage and overtime provisions,
meanwhile, refer to a workweek.\42\ These provisions
answer a different question: how to calculate the
amount of money an employer is required to pay an
employee for a period of work. No matter what pay
period an employer uses (weekly, biweekly, etc.), the
employer's obligations with respect to the minimum wage
and overtime are calculated on a workweek basis.\43\
---------------------------------------------------------------------------
\42\FLSA Sec. Sec. 6-7.
\43\29 C.F.R. Sec. 551.104.
---------------------------------------------------------------------------
In each case, employers have some flexibility to adapt the
relevant unit of time to their distinctive administrative
practices. The month for determining whether an employee could
be categorized as a tipped employee need not be tied to the
calendar month, as long as it is a ``recurring monthly period
beginning on the same day of the calendar month''\44\ Likewise,
a workweek ``need not coincide with the calendar week but may
begin on any day and at any hour of a day,'' provided that it
is ``a fixed and recurring period of 168 hours--seven
consecutive 24-hour periods.''\45\ Employers do not have
freewheeling power to manipulate the start and stop of each
time period throughout a year, but they can use an
administrative calendar that works for their distinctive
operations. For example, a Tuesday-Monday week in a month that
always starts on the fifth day in a fiscal year that starts in
September is valid provided the employer regularly and
consistently applies these months and workweeks for purposes of
their FLSA obligations.
---------------------------------------------------------------------------
\44\29 C.F.R. Sec. 531.56(b).
\45\Id. Sec. 551.104.
---------------------------------------------------------------------------
This bill would effect a bizarre change with respect to the
time basis used in defining tipped employees. In relevant part,
the FLSA definition of tipped employee would be amended to
apply to ``any employee . . . who receives tips sufficient to
reach the minimum wage when combined with the subminimum] for a
period [which] may be (as determined by the employer) a period
of 1 day, 1 week, every other week, every pay period, or 1
month.''\46\
---------------------------------------------------------------------------
\46\TEPA Sec. 2 (amending FLSA Sec. 3(t)).
---------------------------------------------------------------------------
At first glance, this rewritten reference to time periods
in the definition seems intended to eviscerate the current
law's limitation of the subminimum wage to only those workers
who regularly earn tips. Upon closer inspection, however, it
appears to create an ambiguity that could affect the
application of the minimum wage and overtime. It is not
immediately clear how an employer could apply the flexible time
period in the bill's definition: as a period in which an
employer could reclassify a worker as a tipped or non-tipped
employee, or as a period for calculating the amounts of tips
earned for purposes of applying the tip credit.
If the latter interpretation holds, this bill would give
employers enormous power to game the calendar in order to claim
as much in tips as possible to apply to their workers' wages,
when the math works in their favor. For example, an employer
who sees a worker earning a substantial amount of tips in one
good week of an otherwise bad month could opt to dilute the
value of that week by deciding to assess the tip credit over
the whole month. The same employer could switch to a week-by-
week assessment at other points in the calendar year when the
math works in his favor. Jobs that are already economically
precarious would become even more so.
A BETTER WAY
A better approach to the problems of tipped work is
possible. Committee Democrats have proposed bills that value
work and workers rather than make more jobs vulnerable to low
pay and wage theft.
For example, the Raise the Wage Act, led by Ranking Member
Bobby Scott (D-VA), would increase the minimum wage
substantially for all workers, and it would phase out the tip
credit so that tipped workers could enjoy a stable, predictable
minimum wage with tips on top.\47\
---------------------------------------------------------------------------
\47\H.R. 2743, 119th Cong. (2025).
---------------------------------------------------------------------------
Likewise, Rep. Jahana Hayes (D-CT) has introduced, with
support from several other Committee members, the Tipped Worker
Protection Act, legislation designed to ensure millions of
American workers receive their full tips in addition to the
federal minimum wage and increase transparency for service
charges that may or may not be paid directly to employees.\48\
---------------------------------------------------------------------------
\48\H.R. 5112, 119th Cong. (2025).
---------------------------------------------------------------------------
Last Congress, Committee Democrats introduced the Labor
Enforcement to Securely Protect Workers Act, or the LET'S
Protect Workers Act, to increase civil monetary penalties for
tip theft to the same level as penalties for other forms of
wage theft, which collectively would be raised
significantly.\49\
---------------------------------------------------------------------------
\49\H.R. 9137, 118th Cong. (2024).
---------------------------------------------------------------------------
If Congress seeks to take meaningful action to protect
tipped employees, these bills should be prioritized, not H.R.
2312.
CONCLUSION
In the Committee Report accompanying H.R. 2312 the Majority
suggests this bill will end ``regulatory whiplash;'' however,
to the extent that is a real problem, the bill solves it by
clearly tipping the scales in favor of employers at the expense
of tipped employees. If H.R. 2312 becomes law, it would spur
its own statutory whiplash as Congress would need to quickly
repeal it. For the reasons stated above, Committee Democrats
unanimously opposed H.R. 2312 when the Committee on Education
and Workforce considered it on November 20, 2025. We urge the
House of Representatives to do the same.
Robert C. ``Bobby'' Scott,
Ranking Member.
Mark DeSaulnier,
Adelita Grijalva,
Members of Congress.
[all]