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Waiters, bartenders, hairdressers and other Minnesota workers who rely on tips got a big raise this month when the state guaranteed them the same $9.50 hourly minimum wage that other workers will get.
Minnesota is one of five states (along with Connecticut, Delaware, Maryland and West Virginia) plus the District of Columbia to increase its hourly wage floor this year, and in four of them tipped workers also will get a raise, reflecting concern for a category of workers who are often overlooked. Of the 3.3 million workers who rely primarily on tips, about 2 million are waiters and waitresses, according to a recent White House report.
"Tipped workers have been taking it on the chin in all too many states," U.S. Secretary of Labor Thomas Perez told a House panel last month.
Minnesota did not have to enact a separate increase for tipped workers, since it is one of seven states that require employers to pay all workers the same state minimum wage, whether they receive tips or not. Alaska, California, Montana, Nevada, Oregon and Washington are the others.
Delaware and West Virginia did have to enact a separate increase for tipped workers, and they opted to do so. Delaware raised its tipped rate from $2.23 to $3.23 and its hourly minimum rate to $8.25. West Virginia's new minimum rate for tipped workers will be 30 percent of its new $8.75 hourly minimum. That means tipped workers in West Virginia will get at least $2.63, up from $2.13.
Connecticut did not alter the percentage of the overall minimum wage it uses to calculate its minimum wage for tipped workers, but by increasing its overall minimum wage, it will give a raise to tipped workers, too. Next year, Connecticut's minimum wage for tipped workers will be 63.2 percent of the broader rate, meaning that the minimum wage for tipped workers, currently $5.69 per hour, will rise to $6.38 per hour once the state raises its minimum wage to $10.10, which it will do in stages over three years.
Only Maryland raised its minimum wage without giving a raise to tipped workers. The state raised its minimum wage from $7.25 to $10.10, but didn't change its $3.63 minimum for tipped workers.
Jack Temple, a policy analyst with the National Employment Law Project, said the resistance to raising the minimum wage for tipped workers in Maryland may be a sign of things to come. "This is a trend that we're starting to see across the country," Temple said. "The restaurant industry is demanding that the tipped wage remain frozen in exchange for any increase in the full minimum wage."
Congress raised the federal minimum wage to $7.25 in 2007. States are free to set higher rates, but they cannot set lower rates for workers covered under the federal labor law. Businesses with less than $500,000 in gross annual revenue, for example, do not have to pay the federal minimum wage, but do have to adhere to any state minimum wage that applies.
Congress hasn't raised the federal minimum for tipped workers, currently $2.13, in more than 20 years. If a worker's wages and tips do not equal the federal minimum wage during a given pay period, the employer is required to make up the difference.
The stalled action in Congress has prompted states to raise their own minimum wage standards. This year 29 states are considering raising their minimum wage, in addition to the five states plus D.C. that have done so, according to the National Conference of State Legislatures.