A new report by the Economic Policy Institute and the Center on Wage and Employment Dynamics, "Waiting for Change: The $2.13 Federal Subminimum Wage," sheds light on the subminimum wage for tipped workers – 72.9% of whom are women.
The federal tip credit allows employers to pay tipped workers just $2.13 per hour – a rate far below the federal or state minimum wage – as long as this wage, combined with the workers’ tips, equates the federal minimum wage, $7.25 per hour. But most tipped workers are unaware of this requirement. And a recent Department of Labor study found that just 30% of employers who were found to have violated this requirement were in compliance by a later investigation.
Thus tipped workers are more than twice as likely to fall below the federal poverty line. And the gender wage gap affects tipped workers just as it affects women in all careers: women tipped workers earn, on average, $0.50 less per hour than male tipped workers as a whole. Waitresses earned, on average, $0.83 less than waiters.
The authors of "Waiting for Change" endorse the WAGES Act, introduced by Congresswoman Donna Edwards of Maryland. The WAGES Act would incrementally increase the minimum wages for tipped employees over the next three years, to 70% of the regular minimum wage by 2012. "Waiting for Change" also recommends strengthening workplace protections and increasing workplace benefits for tipped workers.
Legal Momentum has always been a leader in promoting opportunity and equality for women in workforce, particularly for women in low-wage jobs. "Waiting for Change" demonstrates Legal Momentum’s advocacy for low-income women is needed now more than ever.
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