[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1314 Introduced in House (IH)]
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119th CONGRESS
1st Session
H. R. 1314
To amend the Fair Labor Standards Act of 1938 to eliminate the separate
minimum wage for tipped employees, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
February 13, 2025
Mr. Horsford (for himself, Mr. Norcross, Ms. Titus, Ms. Lee of Nevada,
Mr. Cleaver, Mrs. Ramirez, Mrs. McIver, Mr. Thompson of Mississippi,
Ms. Velazquez, Mr. Boyle of Pennsylvania, and Mr. Carter of Louisiana)
introduced the following bill; which was referred to the Committee on
Ways and Means, and in addition to the Committee on Education and
Workforce, for a period to be subsequently determined by the Speaker,
in each case for consideration of such provisions as fall within the
jurisdiction of the committee concerned
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A BILL
To amend the Fair Labor Standards Act of 1938 to eliminate the separate
minimum wage for tipped employees, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Tipped Income Protection and Support
Act'' or ``TIPS Act''.
SEC. 2. REPEAL OF SEPARATE MINIMUM WAGE FOR TIPPED EMPLOYEES.
(a) Minimum Wage for Tipped Employees.--Section 3(m)(2)(A) of the
Fair Labor Standards Act of 1938 (29 U.S.C. 203(m)(2)(A)) is amended to
read as follows:
``(A) The wage required to be paid to a tipped employee shall be
the wage set forth in section 6(a)(1). All tips received by such
employee shall be retained by the employee, except that this subsection
shall not be construed to prohibit the pooling of tips among employees
who customarily and regularly receive tips.''.
(b) Penalties.--Section 16 of the Fair Labor Standards Act of 1938
(29 U.S.C. 216), as amended by this Act, is further amended--
(1) 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
(2) 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''.
SEC. 3. DEDUCTION FOR CASH TIPS.
(a) In General.--
(1) Deduction allowed.--Part VII of subchapter B of chapter
1 of the Internal Revenue Code of 1986 is amended by
redesignating section 224 as section 225 and by inserting after
section 223 the following new section:
``SEC. 224. CASH TIPS.
``(a) In General.--There shall be allowed as a deduction an amount
equal to the amount of qualified tips received during the taxable year
that are included on statements furnished to the employer pursuant to
section 6053(a).
``(b) Limitation.--No deduction shall be allowed under subsection
(a) to any individual for any taxable year if the adjusted gross income
of such individual for such taxable year exceeds $112,500.
``(c) Qualified Tips.--For purposes of this section, the term
`qualified tips' means a tip received by an individual--
``(1) from an unrelated party,
``(2) who does not have an ownership stake in the business
which employs them in the job in for which such individual is
receiving a tip, and
``(3) in the course of such individual's employment in an
occupation which traditionally and customarily received tips,
including--
``(A) cosmetology,
``(B) hospitality,
``(C) food and beverage service,
``(D) parking attendants, and
``(E) custodial service.''.
(2) Conforming amendment.--The table of sections for part
VII of subchapter B of chapter 1 of such Code is amended by
redesignating the item relating to section 224 as relating to
section 225 and by inserting after the item relating to section
223 the following new item:
``Sec. 224. Cash tips.''.
(b) Deduction Allowed to Non-Itemizers.--Section 63(b) of the
Internal Revenue Code of 1986 is amended by striking ``and'' at the end
of paragraph (3), by striking the period at the end of paragraph (4)
and inserting ``and'', and by adding at the end the following new
paragraph:
``(5) the deduction provided in section 224.''.
(c) Non-Application of Certain Limitations for Itemizers.--
(1) Deduction not treated as a miscellaneous itemized
deduction.--Section 67(b) of the Internal Revenue Code of 1986
is amended by striking ``and'' at the end of paragraph (11), by
striking the period at the end of paragraph (12) and inserting
``, and'', and by adding at the end the following new
paragraph:
``(13) the deduction under section 224 (relating to cash
tips).''.
(2) Deduction not taken into account under overall
limitation.--Section 68(c) of the Internal Revenue Code of 1986
is amended by striking ``and'' at the end of paragraph (2), by
striking the period at the end of paragraph (3) and inserting
``, and'', and by adding at the end the following new
paragraph:
``(4) the deduction under section 224 (relating to cash
tips).''.
(d) Withholding.--The Secretary of the Treasury (or the Secretary's
delegate) shall modify the tables and procedures prescribed under
section 3402(a) of the Internal Revenue Code of 1986 to take into
account the deduction allowed under section 224 of such Code (as added
by this Act).
(e) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2025.
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