The Minimum Wage Loophole That’s Screwing Over Waiters and Waitresses
As Republicans stonewall President Obama’s initiative to raise the federal minimum wage from $7.25 an hour to $10.10 an hour by 2016, some state lawmakers have taken the matter into their own hands, passing legislation that increases the salaries for America’s most vulnerable workers. But there’s one group that is still largely left out of the minimum wage battle: people who work for tips.
As it stands, only seven states require employers to pay tipped workers the same minimum wage as nontipped workers. The federal minimum wage for the latter is $7.25, but the federal minimum wage for tipped workers has remained stagnate at $2.13 since 1991, with no adjustment for inflation. Employers are supposed to make up the difference if tipped workers aren’t earning the regular minimum wage through their tips, but it doesn’t always happen. The Economic Policy Institute, a left-leaning think tank, found in 2011 that tipped workers are more than twice as likely as other workers to fall under the federal poverty line.
The Minimum Wage Fairness Act, which Obama endorsed, would have gradually raised tipped workers’ minimum wage to 70 percent of the regular minimum wage. But the bill has faced steep opposition from Republicans and the restaurant lobby. According to Open Secrets, the National Restaurant Association, which opposed the minimum-wage hike, spent more than $2.2 million on lobbying last year.
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