Congressman Steven Horsford Introduces TIPS Act to Eliminate Subminimum Wage and Taxes on Tips for Service Workers

WASHINGTON – Today, Congressman Steven Horsford (NV-04) introduced the Tipped Income Protection and Support (TIPS) Act, landmark legislation aimed at eliminating the subminimum wage for tipped workers across the United States. It also ends the income tax on tips these workers receive. The bill seeks to ensure that all workers, regardless of their profession, receive fair wages and are not forced to rely on tips to make ends meet. 

VIDEO OF PRESS CONFERENCE HERE

PHOTOS FROM THE PRESS CONFERENCE

Under the current federal law, tipped workers can be paid as little as $2.13 an hour in several states, allowing employers to rely on customer tips to meet the minimum wage requirements. This system disproportionately impacts women, people of color, and low-wage workers in states such as Texas, Virginia, and Alabama, where the tipped minimum wage remains at $2.13. Nationwide, over 4 million tipped workers rely on this precarious wage system. 

Congressman Horsford highlighted the urgency of the TIPS Act, saying, "No one working full-time in America should live in poverty, yet millions of tipped workers do just that—many of whom are women and people of color. The TIPS Act is about fairness, dignity, and economic justice. By eliminating the subminimum wage, we can ensure that every worker is paid fairly for their labor without relying on the uncertainty of tips."

“For too long, tipped workers—many of them women and people of color—have been forced to survive on poverty wages,” said Saru Jayaraman, President of One Fair Wage and Director of The UC Berkeley Food Labor Research Center. “The subminimum wage is a direct legacy of slavery and continues to keep millions of hardworking people trapped in financial instability. By eliminating this unjust practice and ensuring workers are not taxed on their tips, the TIPS Act gives workers the chance to earn a fair living. It’s time to stop asking customers to subsidize wages and start holding corporations accountable. With the cost of living and affordability crisis being the number one priority for voters this election cycle, this bill is critical to ensuring workers can pay their bills, feed their families, and live with dignity.”

Several states, including Nevada, have already abolished the subminimum wage for tipped workers, with positive results. In Nevada, where the minimum wage applies to all workers, restaurants have seen an increase in productivity, employee retention, and customer satisfaction. Studies show that when workers are paid a fair wage, they experience less financial stress, leading to higher quality service and improved overall workplace morale. California and Washington have also eliminated the subminimum wage with similar outcomes, showing that fair wages do not harm the restaurant industry—in fact, they lead to long-term success. 

The TIPS Act is part of a broader effort to close the racial and gender income gap and increase full economic participation for all. With the introduction of this legislation, Congressman Horsford continues his fight to uplift working families and advance economic equity across the nation.