119-hr1314

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1314 Introduced in House

    (IH) ]

<DOC>

119th CONGRESS
 1st Session
 H. R. 1314

To amend the Fair Labor Standards Act of 1938 to eliminate the separate 
 minimum wage for tipped employees, and for other purposes.

_______________________________________________________________________

 IN THE HOUSE OF REPRESENTATIVES

 February 13, 2025

Mr. Horsford (for himself, Mr. Norcross, Ms. Titus, Ms. Lee of Nevada, 
 Mr. Cleaver, Mrs. Ramirez, Mrs. McIver, Mr. Thompson of Mississippi, 
Ms. Velazquez, Mr. Boyle of Pennsylvania, and Mr. Carter of Louisiana) 
 introduced the following bill; which was referred to the Committee on 
 Ways and Means, and in addition to the Committee on Education and 
 Workforce, for a period to be subsequently determined by the Speaker, 
 in each case for consideration of such provisions as fall within the 
 jurisdiction of the committee concerned

_______________________________________________________________________

 A BILL

To amend the Fair Labor Standards Act of 1938 to eliminate the separate 
 minimum wage for tipped employees, and for other purposes.

 Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

 This Act may be cited as the ``Tipped Income Protection and Support 
Act'' or ``TIPS Act''.

SEC. 2. REPEAL OF SEPARATE MINIMUM WAGE FOR TIPPED EMPLOYEES.

    (a) Minimum Wage for Tipped Employees.--

Section 3
            (m) (2)
        (A) of the 
Fair Labor Standards Act of 1938 (29 U.S.C. 203
            (m) (2)
        (A) ) is amended to 
read as follows:
 ``
        (A) The wage required to be paid to a tipped employee shall be 
the wage set forth in 

section 6

    (a)

    (1) . All tips received by such 
employee shall be retained by the employee, except that this subsection 
shall not be construed to prohibit the pooling of tips among employees 
who customarily and regularly receive tips.''.

    (b) Penalties.--

Section 16 of the Fair Labor Standards Act of 1938 
(29 U.S.C. 216), as amended by this Act, is further amended--

    (1) in subsection

    (b) , by striking ``the sum of any tip 
 credit taken by the employer and all such tips unlawfully kept 
 by the employer'' and inserting ``the sum of all such tips 
 unlawfully used or kept by the employer''; and

    (2) in subsection
            (c) , by striking ``the sum of any tip 
 credit taken by the employer and all such tips unlawfully kept 
 by the employer'' and inserting ``the sum of all such tips 
 unlawfully used or kept by the employer''.

SEC. 3. DEDUCTION FOR CASH TIPS.

    (a) In General.--

    (1) Deduction allowed.--Part VII of subchapter B of chapter 
 1 of the Internal Revenue Code of 1986 is amended by 
 redesignating 

section 224 as 

section 225 and by inserting after 
 

section 223 the following new section:

``

SEC. 224. CASH TIPS.

 ``

    (a) In General.--There shall be allowed as a deduction an amount 
equal to the amount of qualified tips received during the taxable year 
that are included on statements furnished to the employer pursuant to 

section 6053

    (a) .
 ``

    (b) Limitation.--No deduction shall be allowed under subsection

    (a) to any individual for any taxable year if the adjusted gross income 
of such individual for such taxable year exceeds $112,500.
 ``
            (c) Qualified Tips.--For purposes of this section, the term 
`qualified tips' means a tip received by an individual--
 ``

    (1) from an unrelated party,
 ``

    (2) who does not have an ownership stake in the business 
 which employs them in the job in for which such individual is 
 receiving a tip, and
 ``

    (3) in the course of such individual's employment in an 
 occupation which traditionally and customarily received tips, 
 including--
 ``
        (A) cosmetology,
 ``
        (B) hospitality,
 ``
            (C) food and beverage service,
 ``
            (D) parking attendants, and
 ``
        (E) custodial service.''.

    (2) Conforming amendment.--The table of sections for part 
 VII of subchapter B of chapter 1 of such Code is amended by 
 redesignating the item relating to 

section 224 as relating to 
 

section 225 and by inserting after the item relating to 

section 223 the following new item:

``

Sec. 224. Cash tips.''.

    (b) Deduction Allowed to Non-Itemizers.--

Section 63

    (b) of the 
Internal Revenue Code of 1986 is amended by striking ``and'' at the end 
of paragraph

    (3) , by striking the period at the end of paragraph

    (4) and inserting ``and'', and by adding at the end the following new 
paragraph:
 ``

    (5) the deduction provided in 

section 224.''.
            (c) Non-Application of Certain Limitations for Itemizers.--

    (1) Deduction not treated as a miscellaneous itemized 
 deduction.--

Section 67

    (b) of the Internal Revenue Code of 1986 
 is amended by striking ``and'' at the end of paragraph

    (11) , by 
 striking the period at the end of paragraph

    (12) and inserting 
 ``, and'', and by adding at the end the following new 
 paragraph:
 ``

    (13) the deduction under 

section 224 (relating to cash 
 tips).''.

    (2) Deduction not taken into account under overall 
 limitation.--

Section 68
            (c) of the Internal Revenue Code of 1986 
 is amended by striking ``and'' at the end of paragraph

    (2) , by 
 striking the period at the end of paragraph

    (3) and inserting 
 ``, and'', and by adding at the end the following new 
 paragraph:
 ``

    (4) the deduction under 

section 224 (relating to cash 
 tips).''.
            (d) Withholding.--The Secretary of the Treasury (or the Secretary's 
delegate) shall modify the tables and procedures prescribed under 

section 3402

    (a) of the Internal Revenue Code of 1986 to take into 
account the deduction allowed under 

section 224 of such Code (as added 
by this Act).

    (e) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2025.
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