H.R. 2312: Tipped Employee Protection Act

This legislation, titled the Tipped Employee Protection Act, proposes amendments to the Fair Labor Standards Act of 1938 to change how "tipped employees" are defined. Here are the key aspects of the bill:

Definition of Tipped Employees

The amendment makes significant changes to the definition of "tipped employees." Specifically, it removes the current requirement that an employee must "customarily and regularly receive more than $30 a month in tips" to be considered a tipped employee. Instead, the bill would define a tipped employee as one who:

• Receives tips and other cash wages that, when combined with the minimum cash wage required, equals or exceeds the specified federal minimum wage.

Wage Calculation Period

The bill also introduces flexibility regarding the period over which employers can calculate wages. Employers can now choose a time frame ('the period described in this paragraph') to determine if an employee qualifies as a tipped employee. This period can be:

• 1 day
• 1 week
• Every other week
• Every pay period
• 1 month

Intent and Purpose

The primary aim of this bill appears to be to clarify the status of tipped employees, potentially allowing more workers to qualify for protections and wages that meet or exceed the federal minimum wage standards. By broadening the definition and allowing for different pay calculation periods, the legislation seeks to ensure better compensation outcomes for tipped employees.

Relevant Companies

• DRI (Darden Restaurants, Inc.): This company operates several restaurant brands which likely have many employees classified as tipped workers, such as servers and bartenders.
• ROMN (Romano's Macaroni Grill): As with other restaurant chains, changes in tipped employee definitions may affect their wage structures and payroll expenses.
• CMG (Chipotle Mexican Grill, Inc.): Chipotle employs many workers who may receive tips, thus, redefining "tipped employee" could significantly impact their wage policies and operational costs.