In relation to our blog post – To Tip or not to Tip? Hospitality Included – this post explores what the current position on minimum wage and the tip credit of the presidential front runners from each party. According to the Department of Labor, the Federal tipped wage is $2.13 per hour for employees that receive at least $30 per month in tips. If those employees make less than the minimum wage after tips, the employer is required to make the employee’s wages whole up to the minimum wage depending on the state.
Some states, such as California and Nevada, do not have a tipped wage and require all workers to be paid the state minimum wage, while others require employers to pay employees as low as the federal tipped wage or higher. The federal minimum wage is $7.25 and the state minimums vary.
The two leading democratic candidates support an end to the employer tip credit and a higher federal minimum wage. On the other side, the leading republican candidates most likely oppose the end of a tip credit and a raise in minimum wage on a federal level.
Considering any of these candidates could become the next president of the United States, it is important to know what they have to say about this issue.
Hillary Clinton’s position
On March 3rd 2016, The Restaurant Opportunities Centers United reported on Hillary Clinton calling for the abolishment of the tipped wage credit.
In September of 2015, The Daily Caller reported that Hillary Clinton wanted to increase the federal minimum wage to $12 per hour, but also, in Hillary’s words, to ‘end the disgrace of something called the tipped wage’. She made these remarks during a ‘Women for Hillary’ campaign event in Columbus, Ohio.
In this same campaign event, Hillary Clinton also said that many tipped employees are not given their rightful wages by their employers. She stated ‘that money doesn’t get to the people who earned it. Wages are actually stolen’.
By these remarks, it is pretty safe to say that Hillary Clinton is against the tipped wage for tipped workers.
Many of the statements that she made were later disputed by the National Restaurant Association which stated that ‘Tipped employees are guaranteed the Federal minimum wage or higher in many states’ and that ‘employers are required under law to ensure that tipped employees are made while if their salary and tips do not meet the required minimum wage’.
Bernie Sanders’ position
In July of 2015, Bernie Sanders introduced legislation to abolish the tip credit. The bill he introduced would amend the Fair Labor Standards act to increase the Federal minimum wage to $9.00 per hour three months after the act passed, increase the federal minimum wage to $10.50 an hour one year after that date, $12.00 an hour after two years, $13.50 an hour after three years, and finally $15.00 an hour after four years.
However, in the full text of this Act, the tipped wage would be increased by $1.50 until the tipped wage equals the minimum wage effectively phasing out the tip credit given to employers.
This act would effectively get rid of the tipped wage credit given to employers and effectively remove the tipped wage minimum by making it the same as the federal minimum wage.
While Hillary Clinton is against the tipped wage, Bernie Sanders has taken steps to eliminate it.
Donald Trump’s Position
Donald Trump has been noted multiple times as opposing an increase in the minimum wage. However, he has also stated on Twitter that wages are too low and good jobs are too few. While he has not said anything specific on the tip credit or tipped wages, he has said that he is against raising the minimum wage because the United States needs to stay competitive globally.
He does, however, think that a low minimum wage is not necessarily a bad thing in respect to being competitive globally. He is quoted by the Washington times as saying ‘Now, I want to create jobs so that you don’t have to worry about the minimum wage, you’re doing a great job, and you’re making much more than the minimum wage,’
Ted Cruz’s Position
Ted Cruz believes that a minimum wage hike is a bad idea. While we have not been able to find anything on his position on the tipped minimum wage, it is pretty safe to say that if he is against raising the normal minimum wage, he is probably against raising or getting rid of the tipped minimum wage.
CNS news reported that Ted Cruz believes ‘unemployment among young people will go up if the minimum wage goes up- ‘Also that ‘unemployment among Hispanics, among African Americans, among those struggling to get their first job to climb the economic ladder, will go up.’
He believes that raising a minimum wage would make it harder for a business to hire more employees and therefore lead to higher unemployment.
If you are for or against a minimum wage hike, an end to the employer tip credit, or run a business and can see how changes in these laws might affect you, the position of each of these candidates is worth careful consideration. What they say about these laws now may be an indicator of what policy they try to enact in the future.
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