At first glance, a bill that would require the state’s tipped employees be paid the minimum hourly wage makes sense.
Currently assigned to the Senate’s Ways and Means Committee, S.1213, “An Act requiring one fair wage,” would amend the current state statute.
In Massachusetts, as in many parts of the country, tipped employees, exempt from the regular minimum wage, are paid a much lower hourly rate.
But that different pay scale can be deceiving.
According to the state website, the minimum wage for tipped employees who make more than $20 a month in gratuities is $6.15 an hour. This rate will increase incrementally to reach $6.75 per hour in January 2023.
However, in order for employers to pay these employees a different minimum wage, they must inform them of the current law, which stipulates that these employees must receive at least the standard $14.25 hourly minimum wage when actual tips and wages are combined.
If the combined wages and actual tips do not at least equal the regular minimum wage, the employer must pay the employee the difference.
In addition, all tips must be retained by the employee or distributed through a valid tip-pool as defined by MGL c. 149 & 152A.
The law also requires employers to calculate the difference between the service rate and earned tips at the end of every shift worked by the employee.
So, the main difference between these different job classifications pertains to how an employee arrives at the $14.25 figure.
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