Changes for Tipped Workers Closer to Final Approval

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The Independent Regulatory Review Commission (IRRC) has unanimously approved a Department of Labor & Industry regulation to raise pay for those who receive a “tipped minimum wage.” Under the updated regulation, the amount in tips a worker must receive monthly would increase from $30 to $135 before the employer can pay that employee the tipped wage of $2.83/hour.

Additional changes under the updated regulations are as follows:

  • Aligns the 80/20 rule for employer tip credits with recently-updated federal regulations
  • Allows for tip pooling with certain restrictions for manager and business owners
  • Prohibits employers from deducting processing fees from employee tips
  • Requires businesses to clarify that service charges are not gratuities for tipped employees

Upon approval by the Office of Attorney General, the updates will go into effect in 90 days.

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