Higher minimum wage for tipped workers?

On Wednesday, the New Hampshire House voted to raise the minimum wage for tipped employees, from 45% to 50% of the regular minimum wage.  The vote was part of SB 10, a bill to raise the regular minimum wage.  Under the bill, the base pay for tipped employees would increase from $3.27 to $3.62 as soon as the bill passed, $5 next year, and $6 in 2022.

Since the House added this increase to the bill, the Senate must approve that change or form a committee with the House to compromise on a final version.

About the tipped minimum wage

Federal law requires a minimum wage for tipped employees of at least $2.13 per hour, although employees must earn at least $7.25 an hour including tips.  If an employee does not make that much with tips, the employer must cover the difference.

26 states and Washington, D.C. require a tipped wage above that federal minimum. 

Under current New Hampshire law, the base pay for tipped employees is 45% of the regular minimum wage. Since New Hampshire uses the federal minimum of $7.25, the wage for tipped employees is $3.27.

That is the lowest tipped wage in New England: Connecticut is $8.23/hour, Maine is $5.50/hour, Massachusetts is $4.35/hour, Rhode Island is $3.89/hour, and Vermont is $5.39/hour.

Seven other states require employers to pay the same minimum wage to tipped and untipped employees.

Arguments for, against a higher tipped wage

Supporters of a higher wage for tipped employees point to evidence that in states with a lower tipped wage, tipped workers have a higher poverty rate than similar workers in other states.  

Women are generally more likely to work in tipped positions, so raising the tipped wage could help reduce pay differences between men and women.

If workers are less reliant on tips, they may also be less likely to suffer sexual harassment and other mistreatment for the sake of a good tip.

Opponents argue a higher tipped wage will force employers to raise prices or hire fewer workers, both of which would hurt the economy.  

Customers may also tip less if they know employees have a higher wage.

Some restaurants already voluntarily pay higher wages and notify customers not to leave tips.