Businesses already pay the exact minimum wage of $2.13/hour. The employees either make an additional $5.12/hour in tips or the employer must make up the difference at every pay period. Employees routinely underreport their tip earnings beyond the $5.12/hour to not pay taxes and fly under the DoL radar.
Edit: I should add that lots of states and some cities have their own minimum wage laws but they are all structured the same. There is a minimum wage like $10/hour but if an employee is tipped the employer can claim a “tip credit” of like $6 and pay the employee only $4. Then if the employee is underpaid the employer must. Make up the difference. Employees who routinely don’t make full tips are less likely to continue working at the restaurant but you can’t just legally fire them for not making enough tips.
I am sure lots of people have also noticed fast food restaurants pushing for tips for the crew at checkout. This is an industry shift. Same with single owner businesses asking for tips (generally if someone sets their own price a tip shouldn’t be expected, but Square et al made that a normal part of checkout and people now believe it’s necessary). With expected tips getting into the 25-30% territory I wonder if there is an opportunity here for a restaurant chain to advertise itself as “we pay our employees well so you don’t have to”.
> I should add that lots of states and some cities have their own minimum wage laws but they are all structured the same.
Rule of thumb, there's _nothing_ in US law where you can say "things vary by state, but they're all the same in way X".
In this case, California has no concept of tip credits. All employees, regardless of whether they receive tips, must be paid at least minimum wage (Currently 16 $/hr)
There are several laws like that, for example for child support. But there isn’t one for minimum wage. You cannot however violate Federal minimum wage laws as enforced by DoL at the state or local level. So in effect that law spells out a pattern.
Having reviewed these laws in all applicable jurisdictions they do follow the same pattern: California’s tip credit is $0 as of right now. Oh and there is the Panera exception to its minimum wage law which is fairly novel.
> Edit: I should add that lots of states and some cities have their own minimum wage laws but they are all structured the same. There is a minimum wage like $10/hour but if an employee is tipped the employer can claim a “tip credit” of like $6 and pay the employee only $4
This is not true in California, at least. Restaurant workers are paid at least minimum wage (which is $16 or higher depending on locality) and then tips on top. "Tip credit" is not allowed
Edit: I should add that lots of states and some cities have their own minimum wage laws but they are all structured the same. There is a minimum wage like $10/hour but if an employee is tipped the employer can claim a “tip credit” of like $6 and pay the employee only $4. Then if the employee is underpaid the employer must. Make up the difference. Employees who routinely don’t make full tips are less likely to continue working at the restaurant but you can’t just legally fire them for not making enough tips.
I am sure lots of people have also noticed fast food restaurants pushing for tips for the crew at checkout. This is an industry shift. Same with single owner businesses asking for tips (generally if someone sets their own price a tip shouldn’t be expected, but Square et al made that a normal part of checkout and people now believe it’s necessary). With expected tips getting into the 25-30% territory I wonder if there is an opportunity here for a restaurant chain to advertise itself as “we pay our employees well so you don’t have to”.