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Bill would end tip minimum wage


March 19, 2014

HARRISBURG, PA — A bill that will be introduced by Senators Daylin Leach and Mike Stack would end the allowance of a sub-minimum wage for employees who receive tips and raise the overall minimum wage to $12 an hour.

At a news conference on March 13, the senators cited numerous abuses of the laws regarding the “tip credit” and the lopsided effect sub-minimum wages have on female workers. “The tipped minimum wage is an archaic and overly generous allowance for business owners at the expense of low-wage workers,” Leach said. He added that big restaurant chains “pile up thousands of wage law violations for not even paying the reduced wage. It’s time to end this game.”

Pennsylvania law allows for a tip credit that permits employers to use tips against all but $2.83 of the current $7.25 minimum wage. The federal minimum wage for tipped workers is $2.13, and has not changed in more than 20 years. The senators noted that seven states with some of the country’s highest minimum wages don’t allow the tip credit.

In calling for a $12-an-hour minimum wage, Stack said defenders of poverty wages have been putting an added burden on customers and taxpayers for too long. Citing a recent study showing that a modest increase in the minimum wage could reduce public assistance spending by $46 billion over 10 years, Stack said taxpayers are forced to make up the difference between a working wage and a living wage.