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Pennsylvania House of Representatives
05/01/2024 10:43 PM
Pennsylvania House of Representatives
https://www.legis.state.pa.us/cfdocs/Legis/CSM/showMemoPublic.cfm?chamber=H&SPick=20130&cosponId=13925
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House of Representatives
Session of 2013 - 2014 Regular Session

MEMORANDUM

Posted: January 15, 2014 02:36 PM
From: Representative Mark B. Cohen
To: All House members
Subject: Legislation Raising the Tipped Minimum Wage to 70 percent of the General Minimum Wage
 
I will soon introduce a bill to help close the wage gap between tipped employees and all other workers. The bill amends The Minimum Wage Act of 1968 (P.L. 11, No.5) to raise the minimum wage of tipped employees from its current level of $2.13 per hour to 70% of the minimum wage pursuant to the following schedule:

  • $3.83 per hour effective immediately
  • $4.83 per hour beginning July 1, 2014
  • 70% of the minimum wage beginning January 1, 2015.

My proposal models legislation introduced by Senator Christine Tartaglione in the Pennsylvania Senate (SB 1099). It is also similar to several federal initiatives, including the Fair Minimum Wage Act of 2013, introduced by Senator Tom Harkin, and the Working for Adequate Gains for Employment in Services Act (WAGES), introduced by Congresswoman Donna Edwards. All of these initiatives include provisions for increasing the minimum wage for tipped employees pursuant to a formula. The federal bills also include annual adjustments of the wage increase to ensure that it remains equal to 70% of the wage in effect under the Fair Labor Standards Act of 1938 (FLSA) for other employees.

I am introducing this legislation because more and more tipped employees are slipping into poverty. Tipped wages have remained at $2.13 per hour for the last 18 years. In 1996, Congress revoked the percentage system used to determine the wages of tipped employees (formerly at 50% of minimum wage) and locked in the $2.13 dollar amount instead. As a result, the value of wages for tipped workers is less than half of what it would have been had their wages been undisturbed. Tipped employees now earn only 29.4% of minimum wage.

The largest group of tipped workers impacted by this problem is restaurant workers, (waiters, waitresses, bussers, and other servers). Nearly 15% of all waiters and waitresses live below the federal poverty level, while only 5.7% of the workforce as a whole falls beneath this threshold - and waiters and waitresses are among the highest paid tipped employees. Unfortunately, the poverty rate among all other tipped employees is much higher than 15%.

A 2009 analysis by the National Employment Law Project of tipped workers details the populations most affected by the reduced hourly wage of tipped employees, showing:

  • 62% are women;
  • 39.3% are minorities;
  • 33% are between 16 and 20 years old;
  • 18.8% are between 21 and 24 years old;
  • 33.9% are between 25 and 44 years old; and
  • 14.5% are 45 years old and older.

Also consider the disproportionate impact these low wages have on minorities - 22.3% of African-American tipped employees and 18% of Latino tipped employees have family incomes below the federal poverty level.

Please join me in working to improve the lives of tipped workers by co-sponsoring this important legislation. If you have any questions about my proposal, please contact Helen Norton of my office at 7-4117 or hnorton@pahouse.net.

Introduced as HB2034