•Press Release Jobs and Wages Minimum Wage Subminimum Wage Tipped Minimum Wage
Washington, DC — The enactment of the 1938 federal minimum wage excluded waitstaff. It took until 1966 for waitstaff to get covered, and then only by a subminimum wage. CEPR’s Sylvia Allegretto explains in this new commentary that the tip you leave for the waitperson serving you first pays the employer to make up the difference between the subminimum wage and the minimum wage.
“The public is often unaware that customers foot the majority of the wage bill for many employers,” explains Allegretto. “Today, the portion of the federal minimum wage covered by tips is 71 percent.”
For more information on the various state policies on subminimum and minimum wages along with tip credit amounts, see the full report by Dr. Allegretto.
