Tipped employees

(a) Base minimum wage for tipped employees and tips retained by employees Section 3(m)(2)(A)(i) of the Fair Labor Standards Act of 1938 (29 U.S.C. 203(m)(2)(A)(i)) 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 effective date under section 7 of the Raise the Wage Act of 2025, $6.00 an hour; (II) $8.00 an hour, beginning 1 year after such effective date; (III) $10.00 an hour, beginning 2 years after such effective date; (IV) $12.00 an hour, beginning 3 years after such effective date; (V) $13.50 an hour, beginning 4 years after such effective date; (VI) $15.00 an hour, beginning 5 years after such effective date; (VII) $17.00 an hour, beginning 6 years after such effective date; and (VIII) for each succeeding 1-year period after the increase made pursuant to subclause (VII), the minimum wage in effect under section 6(a)(1); and. (b) Tips retained by employees Section 3(m)(2)(A) of the Fair Labor Standards Act of 1938 (29 U.S.C. 203(m)(2)(A)) is amended— (1) in the second sentence of the matter following clause (ii), by striking of this subsection, and all tips received by such employee have been retained by the employee and inserting of this subsection. Any employee shall have the right to retain any tips received by such employee; and (2) by adding at the end the following: An employer shall inform each employee of the right and exception provided under the preceding sentence.. (c) Scheduled repeal of separate minimum wage for tipped employees (1) Tipped employees Section 3(m)(2)(A) of the Fair Labor Standards Act of 1938 (29 U.S.C. 203(m)(2)(A)), as amended by subsections (a) and (b), is further 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) Publication of notice Subsection (i) of section 6 of the Fair Labor Standards Act of 1938 (29 U.S.C. 206), as added by section 5 and amended by section 6(b)(1), is further amended by striking or in accordance with subclause (II) or (III) of section 3(m)(2)(A)(i),. (3) Effective date The amendments made by paragraphs (1) and (2) shall take effect on the date that is 1 day after the date on which the hourly wage under subclause (VIII) of section 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 (a), takes effect. (d) Penalties Section 16 of the Fair Labor Standards Act of 1938 (29 U.S.C. 216) is amended— (1) in the third sentence of subsection (b), by inserting or used after kept; and (2) in the second sentence of subsection (e)(2), by inserting or used after kept.