Minimum Wage For Tipped Workers Could Be On The Rise

The minimum wage for tipped employees in New Jersey is astonishingly low, slightly over two bucks an hour.

Today, the Assembly Labor committee on advanced a bill sponsored by Assembly members Shavonda Sumter, Marlene Caride, Joe Egan and Wayne DeAngelo that would raise the minimum hourly wage for tipped workers.

The legislation would provide that: after June 30, 2012, an employer may claim a credit for gratuities or tips received by an employee against the hourly wage rate paid to the employee in an amount not to exceed 60% of the minimum hourly wage rate required by law; and after June 30, 2013, an employer may claim a credit for gratuities or tips in an amount not to exceed 31% of the minimum hourly wage rate required by law.

By allowing the employer to claim these credits, the bill would effectively require employers to compensate their employees at an hourly rate of at least 40 percent of the minimum wage ($2.90 per hour) after June 30, 2012, and an hourly rate of at least 69% of the minimum wage ($5.00 per hour) after June 30, 2013 and beyond. The remainder of the employee’s compensation may be comprised of tips or gratuities, as long as the employee earns at least the current minimum wage required by state and federal law ($7.25 per hour). Most employees who rely on tips or gratuities are currently paid the federal minimum wage for tipped workers of $2.13 per hour.

“The minimum wage for tipped workers in New Jersey is $2.13 per hour, a paltry sum that has been frozen for more than 20 years and is lower than most states, including all of our surrounding states,” explains Sumter. “It is time for New Jersey to catch up.”

Restaurant and bar owners say the profit margin is already too thin and if the wage increase goes into effect they might have to scale back employees’ hours or hire less workers.