Waitstaff and workers who rely on tips and gratuities could see their first hourly wage increase in more than 35 years under legislation unveiled Thursday.
Sponsored by Rep. Kim Williams, House Bill 252 would replace the current floor for tipped employees from $2.23 per hour with a requirement they not be paid less than 65 percent of Delaware’s minimum wage. Under the current $8.75 per hour wage, that would be $5.69. When the minimum wage increases to $9.25 per hour on October 1, the tipped wage minimum wage would increase to $6.01 per hour.
Delaware has among the lowest’slowest minimum wages for tipped workers. Many states have higher wages, with a few requiring the employer to pay the state’s minimum wage.
The bill was introduced after a proposal to raise the minimum wage $1 a year until pay totals $15 an hour ended up being stuck in committee.
The minimum wage for employees who receive tips or gratuities has not changed since 1983, when the overall state minimum wage was $3.35 per hour. Tipped wage workers at that time were paid a percentage – 66.67 percent – of the minimum wage, which was $2.23. In 1989, the General Assembly changed the hourly wage to a flat $2.23 per hour (effective 1990), where it has remained since, according to a release from House Democrats.
“When I waited tables at Mrs. Robino’s 35 years ago, I made the same hourly wage that waiters and waitresses make today. It’s unconscionable to think that we have gone 30 years without providing even a modest increase in the minimum wage that these workers earn,” said Rep. Williams, D-Newport. “While waitstaff earn more in tips today than decades ago, taxes and the cost of healthcare have increased, and so has the cost of living. Because their tips are a much larger part of their overall pay, it means there’s a great deal of unpredictability in their wages, which can create problems.
Since 1990, when Delaware’s tipped wage was locked in at $2.23, the cost of living has nearly doubled, while prices for many consumer goods, such as bread, milk and gas, have doubled or more. Median housing values have grown by more than 125 percent. In-state tuition for the University of Delaware has ballooned by more than 450 percent in that time, the release stated.
The legislation Thursday that would clarify the definition of employees who receive gratuities. The statute surrounding tipped wages is complex, allowing employers to have different interpretations.
House Bill 251 would clarify those definitions and require more accountability from employers. It would define employees who receive gratuities as including employees who receive tips, that these employees must earn at least 50 percent of their income from tips or gratuities, and that the tips must come directly from customers not from tip pools or other mechanisms.
Additionally, tips automatically added to credit card charges would be treated like tips or gratuity and must be paid by the employer directly to the employee at the next pay period as opposed to being held by the employer waiting to receive payment from the credit card company. The employer would not be permitted to deduct service fees from the employees’ tips or gratuities under the bill