Tennessee bill would allow tipped employees to earn minimum wage plus tips

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SAN FRANCISCO – DECEMBER 03: Waiter Alexander Alioto prepares to serve lunch to customers at Alioto’s Seafood Restaurant December 3, 2008 in San Francisco, California. A report by The Institute for Supply Management says that its services sector index dropped in November to 37.3, down from 44.4 in October as the service industry struggles through […]

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MEMPHIS, Tenn. — A bill proposed in the Tennessee legislature would allow tipped employees in the state to earn the state's minimum wage, plus any tips.

Senate Bill 1851, proposed by Sen. Raumesh Akbari (D-Memphis), would increase the earnings of tipped employees from the current $2.13 an hour plus tips to $7.25 an hour plus tips.

“The minimum wage for tipped workers in Tennessee is $2.13 an hour and it hasn’t changed since 1996," Sen. Akbari said. "Tipped workers already have unpredictable pay and schedules. The least we can do is abolish the sub-minimum wage in Tennessee and provide some financial predictability to the thousands of hard-working people in the service industry.”

The bill was introduced Friday and passed first consideration Monday.

As it stands now, tipped employees earn $2.13 per hour on top of their tips. If the tipped hourly rate does not meet minimum wage, the employer must pay the employee the amount up to minimum wage.

The proposed bill would do away with this mandate, as all tipped employees will start earning $7.25 per hour before tips.

Se. Akbari said the latest research suggests tipped workers will benefit from this change. They would have increased take-home pay and little to no change in employment.

“The bottom line is, we want our workers to be able to make more money, to be able to take home money to care for their families," she said. "We can give them a better base, and then they can have tips to add on to it.”

Sen. Akbari said ultimately, the 340% raise would greatly impact the lives of the tipped workers.

“This will have a tremendous impact," she said. "You’re talking about folks that don’t necessarily have health care, they don’t have paid vacations. This will give them a better quality of life, and it will give their families a better quality of life.”

This is one of a few wage bills proposed at the state level.

Sen. Sara Kyle (D-Memphis) proposed a bill last week that would raise the state's minimum wage to $15 per hour. If passed, the bill would go into effect July 1, 2020.

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