I
119THCONGRESS
1
STSESSION 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
FEBRUARY13, 2025
Mr. H
ORSFORD(for himself, Mr. NORCROSS, Ms. TITUS, Ms. LEEof Nevada,
Mr. C
LEAVER, Mrs. RAMIREZ, Mrs. MCIVER, Mr. THOMPSONof Mis-
sissippi, Ms. V
ELA´ZQUEZ, Mr. BOYLEof 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 with-
in the jurisdiction of the committee concerned
A BILL
To amend the Fair Labor Standards Act of 1938 to elimi-
nate the separate minimum wage for tipped employees,
and for other purposes.
Be it enacted by the Senate and House of Representa-1
tives of the United States of America in Congress assembled, 2
SECTION 1. SHORT TITLE. 3
This Act may be cited as the ‘‘Tipped Income Protec-4
tion and Support Act’’ or ‘‘TIPS Act’’. 5
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SEC. 2. REPEAL OF SEPARATE MINIMUM WAGE FOR TIPPED 1
EMPLOYEES. 2
(a) M
INIMUMWAGE FORTIPPEDEMPLOYEES.—Sec-3
tion 3(m)(2)(A) of the Fair Labor Standards Act of 1938 4
(29 U.S.C. 203(m)(2)(A)) is amended to read as follows: 5
‘‘(A) The wage required to be paid to a tipped em-6
ployee shall be the wage set forth in section 6(a)(1). All 7
tips received by such employee shall be retained by the 8
employee, except that this subsection shall not be con-9
strued to prohibit the pooling of tips among employees 10
who customarily and regularly receive tips.’’. 11
(b) P
ENALTIES.—Section 16 of the Fair Labor 12
Standards Act of 1938 (29 U.S.C. 216), as amended by 13
this Act, is further amended— 14
(1) in subsection (b), by striking ‘‘the sum of 15
any tip credit taken by the employer and all such 16
tips unlawfully kept by the employer’’ and inserting 17
‘‘the sum of all such tips unlawfully used or kept by 18
the employer’’; and 19
(2) in subsection (c), by striking ‘‘the sum of 20
any tip credit taken by the employer and all such 21
tips unlawfully kept by the employer’’ and inserting 22
‘‘the sum of all such tips unlawfully used or kept by 23
the employer’’. 24
SEC. 3. DEDUCTION FOR CASH TIPS. 25
(a) I
NGENERAL.— 26
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(1) DEDUCTION ALLOWED .—Part VII of sub-1
chapter B of chapter 1 of the Internal Revenue Code 2
of 1986 is amended by redesignating section 224 as 3
section 225 and by inserting after section 223 the 4
following new section: 5
‘‘SEC. 224. CASH TIPS. 6
‘‘(a) I
NGENERAL.—There shall be allowed as a de-7
duction an amount equal to the amount of qualified tips 8
received during the taxable year that are included on 9
statements furnished to the employer pursuant to section 10
6053(a). 11
‘‘(b) L
IMITATION.—No deduction shall be allowed 12
under subsection (a) to any individual for any taxable year 13
if the adjusted gross income of such individual for such 14
taxable year exceeds $112,500. 15
‘‘(c) Q
UALIFIEDTIPS.—For purposes of this section, 16
the term ‘qualified tips’ means a tip received by an indi-17
vidual— 18
‘‘(1) from an unrelated party, 19
‘‘(2) who does not have an ownership stake in 20
the business which employs them in the job in for 21
which such individual is receiving a tip, and 22
‘‘(3) in the course of such individual’s employ-23
ment in an occupation which traditionally and cus-24
tomarily received tips, including— 25
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‘‘(A) cosmetology, 1
‘‘(B) hospitality, 2
‘‘(C) food and beverage service, 3
‘‘(D) parking attendants, and 4
‘‘(E) custodial service.’’. 5
(2) C
ONFORMING AMENDMENT .—The table of 6
sections for part VII of subchapter B of chapter 1 7
of such Code is amended by redesignating the item 8
relating to section 224 as relating to section 225 9
and by inserting after the item relating to section 10
223 the following new item: 11
‘‘Sec. 224. Cash tips.’’.
(b) DEDUCTIONALLOWED TO NON-ITEMIZERS.— 12
Section 63(b) of the Internal Revenue Code of 1986 is 13
amended by striking ‘‘and’’ at the end of paragraph (3), 14
by striking the period at the end of paragraph (4) and 15
inserting ‘‘and’’, and by adding at the end the following 16
new paragraph: 17
‘‘(5) the deduction provided in section 224.’’. 18
(c) N
ON-APPLICATION OF CERTAINLIMITATIONS 19
FORITEMIZERS.— 20
(1) D
EDUCTION NOT TREATED AS A MISCELLA -21
NEOUS ITEMIZED DEDUCTION .—Section 67(b) of the 22
Internal Revenue Code of 1986 is amended by strik-23
ing ‘‘and’’ at the end of paragraph (11), by striking 24
the period at the end of paragraph (12) and insert-25
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ing ‘‘, and’’, and by adding at the end the following 1
new paragraph: 2
‘‘(13) the deduction under section 224 (relating 3
to cash tips).’’. 4
(2) D
EDUCTION NOT TAKEN INTO ACCOUNT 5
UNDER OVERALL LIMITATION .—Section 68(c) of the 6
Internal Revenue Code of 1986 is amended by strik-7
ing ‘‘and’’ at the end of paragraph (2), by striking 8
the period at the end of paragraph (3) and inserting 9
‘‘, and’’, and by adding at the end the following new 10
paragraph: 11
‘‘(4) the deduction under section 224 (relating 12
to cash tips).’’. 13
(d) W
ITHHOLDING.—The Secretary of the Treasury 14
(or the Secretary’s delegate) shall modify the tables and 15
procedures prescribed under section 3402(a) of the Inter-16
nal Revenue Code of 1986 to take into account the deduc-17
tion allowed under section 224 of such Code (as added 18
by this Act). 19
(e) E
FFECTIVEDATE.—The amendments made by 20
this section shall apply to taxable years beginning after 21
December 31, 2025. 22
Æ
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