HOUSE BILL ANALYSIS
HB 2073
Brief Description: Prohibiting employers from requiring that tips be given to the employer.
Sponsors: Representatives McMorris, Lisk, and Clements
Hearing: March 3, 1997
BACKGROUND:
Federal and state laws establish a minimum wage affecting full-time and part-time workers in the private and public sectors. In Washington, the minimum wage law is administered by the Department of Labor and Industries.
Federal law
The federal minimum wage is $4.75 per hour, and will increase to $5.15 per hour on September 1, 1997. Federal law allows an employee=s tips to be counted as wages in meeting an employer=s minimum wage obligation. Employers of Atipped employees@ must pay at least $2.13 per hour if they claim a tip credit against their minimum wage obligation. If an employee=s tips combined with the employer=s cash wage of at least $2.13 per hour do not equal the minimum hourly wage, the employer must make up the difference. Certain other conditions must also be met.
State law
The state minimum wage is $4.90 per hour. The department has administratively determined that the Minimum Wage Act prohibits tip credit. Therefore, an employer must pay Atipped employees@ a cash wage of $4.90 per hour. All tips given to an employee are the property of the employee.
The minimum wage provisions more beneficial to employees govern, whether federal or state.
SUMMARY OF BILL:
Employers of Atipped employees@ may count tips as wages in meeting any state minimum wage rate above $4.90 per hour. The amount of tips considered as wages may not be greater than the value of tips actually received by the employee. The tips are the property of the employee. Tip pooling is not prohibited.