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OLR Bill Analysis
sSB 221
AN ACT CONCERNING THE MINIMUM FAIR WAGE AND SERVICE
CHARGES.
SUMMARY
This bill phases out the state wage law’s “tip credit” provision
between July 1, 2024, and July 1, 2027. The provision generally allows
employers to pay certain employees who customarily and regularly
receive tips less than the minimum wage, using their tips to meet the
remainder of the minimum wage requirement. If the tips do not make
up the difference, then the employer must cover it.
Under current law, the tip credit allows employers to pay hotel and
restaurant staff as low as $6.38 per hour (40.7% of the current $15.69
minimum wage) and bartenders $8.23 per hour (52.5% of the current
minimum). The table below shows the bill’s phase-out schedule and
percentage of the minimum wage employers must pay these employees
under the bill’s revised tip credit provision. By law, the minimum wage
is adjusted for inflation at the start of each new calendar year.
Table: Tip Credit Phase Out Under the Bill
Effective Date Percentage of Minimum Wage Employer Must Pay
Hotel and Restaurant Staff Bartenders
Current law 40.7% 52.5%
July 1, 2024 65.8% 78.2%
July 1, 2025 78.0% 88.0%
July 1, 2026 90.0% 91.8%
July 1, 2027 100% 100%
The bill also makes it an unfair or deceptive trade practice under the
Connecticut Unfair Trade Practices Act (CUTPA) for a restaurant to
charge a service fee to a customer without disclosing the fee’s amount
and purpose before the customer orders (see “BACKGROUND”). 2024SB-00221-R000293-BA.DOCX
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Additionally, the bill removes provisions that currently allow (1)
employers to pay unemancipated minors (under age 18) 85% of the
minimum wage for their first 90 days of employment and (2) the labor
commissioner to adopt regulations on modifying the minimum wage
for learners and apprentices. In doing so, the bill requires that the
minors, learners, and apprentices be paid at least the full minimum
wage. Current regulations allow the labor commissioner to give written
permission for learners and apprentices to be paid less than the
minimum wage under certain conditions (see “BACKGROUND”).
Lastly, the bill makes conforming changes that, among other things,
remove a prohibition on employers displacing employees to hire minors
at a sub-minimum wage.
EFFECTIVE DATE: July 1, 2024
BACKGROUND
Connecticut Unfair Trade Practices Act (CUTPA)
The law prohibits businesses from engaging in unfair and deceptive
acts or practices. CUTPA allows the consumer protection commissioner
to issue regulations defining what constitutes an unfair trade practice,
investigate complaints, issue cease and desist orders, order restitution
in cases involving less than $10,000, enter into consent agreements, ask
the attorney general to seek injunctive relief, and accept voluntary
statements of compliance. It also allows individuals to sue. Courts may
issue restraining orders; award actual and punitive damages, costs, and
reasonable attorney’s fees; and impose civil penalties of up to $5,000 for
willful violations and $25,000 for violation of a restraining order (CGS §
42-110a et seq.).
Learners
Under current regulations, “learners” are students in an established
vocational training program for an occupation that is not apprenticeable
but has a long training period. They may be paid a sub-minimum wage
for up to 200 hours in an approved training program with written
permission from the labor commissioner (Conn. Agencies Regs., § 31-
60-7). 2024SB-00221-R000293-BA.DOCX
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Apprentices
Under current regulations, an “apprentice” is someone at least age 16
who is employed to learn a skilled trade in a bona fide apprentice
program approved by the Connecticut State Apprenticeship Council.
An employer must have permission from the labor commissioner for
each apprentice paid less than the minimum wage (Conn. Agencies
Regs., § 31-60-8).
Related Bill
sHB 5236, § 25, favorably reported by the General Law Committee,
among other things, allows the Department of Consumer Protection to
impose a civil penalty of up to $5,000 for CUTPA violations, after an
administrative hearing.
COMMITTEE ACTION
Labor and Public Employees Committee
Joint Favorable Substitute
Yea 8 Nay 4 (03/19/2024)