Bill Seeks to More Than Double the Minimum Wage for Tipped Workers by July 2013

On March 8, 2012, a bill (A2708) was introduced to the Assembly Labor Committee (and has since advanced to a second reading in the Assembly), which would substantially alter the laws governing the compensation of tipped workers in New Jersey. Most employees who rely on tips and gratuities are currently paid the federal minimum wage for tipped workers of $2.13 per hour. If signed into law, the bill would effectively require employers to pay their tipped workers at an hourly rate of at least $2.90 per hour starting on June 30, 2012 through June 30, 2013, and an hourly rate of at least $5.00 an hour from July 1, 2013 and beyond. The remainder of the employee’s compensation could continue to be comprised of tips or gratuities (received directly from patrons or pooled among co-workers), so long as the employee earns at least the current minimum wage required by state and federal law ($7.25 per hour, although two pending bills seek to increase that rate to $8.50 per hour). The bill also would require employers, for every pay period, to provide substantial evidence that the amount claimed for the credit of gratuities or tips was actually received by the employee and that no part of the amount claimed was returned to the employer. Finally, the bill requires that every employer must notify each employee for whom the employer claims the credit of gratuities or tips.

Note: this article was published in the April 2012 issue of the New Jersey eAuthority.