Scheduled repeal of separate minimum wage for tipped employees

(a) In general (1) Repeal Section 3(m)(2)(B) of the Fair Labor Standards Act of 1938 (29 U.S.C. 203(m)(2)(A)), as so redesignated by section 3(a) and as amended by section 3(b) of this Act, is amended by striking the sentence beginning with In determining the wage an employer is required to pay a tipped employee, and all that follows through of this subsection. and inserting The wage required to be paid to a tipped employee shall be the wage set forth in section 6(a)(1).. (2) Conforming amendments (A) Retention of tips Section 3(m)(2)(C) of the Fair Labor Standards Act of 1938 (29 U.S.C. 203(m)(2)(B)), as so redesignated by section 3(a) and as amended by section 3(c) of this Act, is further amended in clause (i) of such section 3(m)(2)(C) by striking Regardless of whether or not an employer takes a tip credit, the employer and inserting An employer. (B) Status as a tipped employee Subsection (t) of section 3 of the Fair Labor Standards Act of 1938 (29 U.S.C. 203) is repealed. (C) Penalties Section 16 of the Fair Labor Standards Act of 1938 (29 U.S.C. 216), as amended by this Act, is further amended— (i) in subsection (b), by striking the sum of any tip credit taken by the employer and all such tips unlawfully kept by the employer and inserting the sum of all such tips unlawfully used or kept by the employer; and (ii) in subsection (c), by striking the sum of any tip credit taken by the employer and all such tips unlawfully kept by the employer and inserting the sum of all such tips unlawfully used or kept by the employer. (3) Delayed effective date (A) In general Except as provided in subparagraph (B), the amendments made by paragraphs (1) and (2) shall take effect with the beginning of the first 1-year period described in 3(m)(2)(A)(i) of the Fair Labor Standards Act of 1938 (29 U.S.C. 203(m)(2)(A)(i)), as amended by subsection (b), for which the hourly wage for such 1-year period would equal or exceed the minimum wage in effect under section 6(a)(1) as of the beginning of such 1-year period. (B) Special rule for tip pools established or maintained during transition period In any case in which a system to pool tips is established for the non-supervisory employees of an employer in accordance with section 3(m)(2)(D) of such Act (29 U.S.C. 203(m)(2)(D)) (as added by section 3(d) of this Act) prior to the beginning of the 1-year period described in subparagraph (A), the amendments made by paragraphs (1) and (2) shall apply with respect to such employer beginning with the date on which such system is established. (b) Minimum wage for tipped employees during transition period (1) In general Clause (i) of section 3(m)(2)(B) of the Fair Labor Standards Act of 1938 (29 U.S.C. 203(m)(2)(A)), as so redesignated by section 3(a) of this Act, is amended to read as follows: (i) the cash wage paid such employee, which for purposes of such determination shall be not less than— (I) for the 1-year period beginning on the date of enactment of the Tipped Worker Protection Act, $3.60 an hour; (II) for each succeeding 1-year period, an hourly wage equal to the amount determined under this clause for the preceding 1-year period increased by $1.50 (but not to exceed the minimum wage in effect under section 6(a)(1) as of the beginning of such 1-year period); and. (2) Definition of tipped employee Section 3(t) of such Act (29 U.S.C. 203(t)) is amended by striking he customarily and regularly receives more than $30 a month in tips and inserting the employee customarily and regularly receives for each month an amount in tips equal to (or in excess of) the difference between the total cash wages paid to the employee under subsection (m)(2)(A)(i) for such month and the total wages that would have been paid to the employee for the hours worked in such month pursuant to the minimum wage in effect under section 6(a)(1) but for subsection (m)(2), except that an employee shall not be considered a tipped employee for any workweek in which the employee spends more than 20 percent of the employee’s hours of employment performing duties related to the employee’s occupation for which the employee does not directly receive tips.