Tennessee Lawmakers Could Raise the Wages of Tipped Workers

Supermajority Education Fund

February 6, 2020

Tennessee lawmakers are considering a bill that would raise the wages of tipped workers from $2.13 plus tips an hour to $7.25 plus tips — an increase that could mitigate the effects of sexual harassment and racial bias on workers and improve their quality of life. Tennessee state senator Raumesh Akbari (D) proposed the bill, SB 1851, which went on to the Senate Commerce and Labor Committee last week.

Under the federal Fair Labor Standards Act, the minimum wage for tipped employees is only $2.13 an hour. But in recent years, several states have put legislation in place to ensure these workers make more than that minimum. Eight states have ensured that tipped workers make much more than the $2.13 an hour tipped minimum wage and make at least the federal minimum wage plus tips, and 29 states and the District of Columbia have minimum wages above the current federal minimum wage of $7.25.

According to the Economic Policy Institute, which used 2011-2013 data, 66.6 percent of tipped workers are women, and, at $10.07 in median wages, female tipped workers make less than male tipped workers, who made $10.63. In 2014, Restaurant Opportunities Centers (ROC) surveyed nearly 700 current and former restaurant workers and found that 80% of women said they experienced sexual harassment from co-workers and customers. 

Forty percent of people who work for tips are people of color, and 17% of tipped workers of color live in poverty compared to 13% of workers overall. According to the Georgetown Law and the Leadership Conference and Education Fund, the system of tipping without paying workers a decent wage began after the Civil War when some businesses wanted former slaves to work for tips alone.

Raising the wages of tipped workers could make life better for people experiencing harassment and discrimination for their gender, ethnicity, and race, David Cooper, senior economic analyst at the Economic Policy Institute, told Supermajority News

“If they knew that at the end of the week, they were going to get a solid paycheck for at least the minimum wage regardless of what happened to their tips, that would give them a little more flexibility and freedom,’” Cooper said. “A worker may feel like they have to tolerate sexual harassment or discrimination [from a manager] in order to get good shifts because good shifts are the ones where you get the best tips.”

The current federal minimum wage plus tips will help workers, but is still woefully inadequate, Cooper said. Tennessee state senator Sara Kyle (D)  recently introduced a bill that would raise the state’s minimum wage to $15 an hour and the Raise the Wage Act, which the U.S. House passed last July, would raise the federal minimum wage to $15 an hour by 2025 and eventually abolish the lower minimum wage for tipped workers. Cooper said that wage would be “transformative” for the job quality of tipped workers. The Senate did not take up the legislation.