PA 08-113—sSB 55 (VETOED; OVERRIDDEN)

Labor and Public Employees Committee

Government Administration and Elections Committee

AN ACT CONCERNING THE TIP CREDIT

SUMMARY: Effective January 1, 2009, this act increases the minimum wage tip credit for hotel and restaurant employers from 8. 2% to 11% for bartenders and from 29. 3% to 31% for service employees (e. g. , waiters and waitresses). The tip credit allows hotels and restaurants to pay service employees and bartenders, who customarily and regularly receive tips, less than minimum wage as long as tips make up the difference. Under the act, a hotel or restaurant can pay (1) a bartender 11% less than minimum wage and (2) a waiter or waitress 31% less than minimum wage.

EFFECTIVE DATE: October 1, 2008

HOTEL AND RESTAURANT TIP CREDIT

Table 1 shows how the prior tip credit and the act each reduces the minimum wage a restaurant or hotel must pay a service employee as long as the employee's tips bring his or her wage up to the minimum state hourly wage.

Table 1: Tip Credit Impact on Minimum Wage

 

Minimum Hourly Wage

Hourly Wage with Tip Credit

Prior Law

The Act

Bartenders

$7. 65

$7. 02

$6. 81

Waiters, waitresses, & other service employees

$7. 65

$5. 41

$5. 28

BACKGROUND

Related Public Act

PA 08-92 increases the minimum wage on January 1, 2009 from $7. 65 to $8. 00 and on January 1, 2010 to $8. 25.

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