Tipped Employee Protection Act
Summary
The Tipped Employee Protection Act amends the Fair Labor Standards Act of 1938, revising the definition of 'tipped employee'. It removes the $30 monthly tip threshold and focuses on whether an employee's combined tips and cash wage meet the minimum wage. The bill also allows employers to define the 'work period' for calculating wages, offering flexibility in how wages are assessed.
Expected Effects
The primary effect will be a change in how tipped employees are classified and compensated. This could lead to more consistent wage standards and potentially reduce wage disparities among tipped workers. Employers will have more flexibility in defining work periods for wage calculations.
Potential Benefits
- Ensures that tipped employees always earn at least the minimum wage.
- Provides clarity on the definition of 'tipped employee'.
- Offers employers flexibility in defining work periods for wage calculations.
- Potentially reduces wage disparities among tipped workers.
- May simplify wage compliance for employers.
Most Benefited Areas:
Potential Disadvantages
- Could increase administrative burden for employers to track wages and tips.
- May lead to disputes over what constitutes a 'reasonable' work period.
- Potential for employers to manipulate work periods to minimize wage costs.
- Possible reduction in take-home pay for some tipped employees if tips are used to offset minimum wage requirements.
- Enforcement challenges to ensure compliance with the new definition.
Constitutional Alignment
The bill aligns with Congress's power to regulate interstate commerce under Article I, Section 8, Clause 3, as it pertains to labor standards. It does not appear to infringe upon any individual liberties or rights protected by the Constitution or its amendments. The amendment to the Fair Labor Standards Act falls within the scope of congressional authority to legislate on matters affecting commerce and labor conditions.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).