facebook pixal

House approves a $15 minimum wage

The measure also calls for phasing out the tip credit.
Photograph: Shutterstock

The U.S. House of Representatives has approved an increase in the federal minimum wage to $15 an hour within six years. 

The measure would also phase out the tip credit, a key break for full-service restaurants.

Fight for $15, a union-backed movement to set $15 as the minimum wage, hailed the vote as a “historic victory.”

The National Restaurant Association's EVP of public affairs called the new pay floor set by the bill, H.R. 582, as "the wrong wage at the wrong time, implemented in the wrong way."

"“Thousands of restaurant industry employees, leaders and community members have called and emailed Congress to share their concerns about how H.R. 582 would cripple small and family-owned businesses," said Sean Kennedy, essentially the association's top government-affairs executive. "They have explained that the wage hike is a job killer in their communities, and that eliminating the tip credit overwhelmingly supported by employees, would cut salaries that right now average $19-25 per hour." 

The increase is the first wage hike approved by the House since 2007, when it passed a measure raising the pay floor to $7.25 an hour as of 2009. That bill set the minimum wage for servers, bartenders and other tipped employees at $2.13 an hour, provided that gratuities made up the $5.12 that would bring them to an income of $7.25 per hour. The Raise the Wage Act, approved today by a 231-199 vote, would gradually raise the wage mandated for tipped employees to $15 an hour. 

The bill calls for setting the minimum wage for nontipped employees at $8.35 an hour three months after the measure becomes law. It would then climb every year afterward by about $1.30 until hitting $15 in 2025.

The minimum wage paid directly to tipped employees would rise to $3.60 three months after the law is enacted, and then increase by at least $1.50 a year afterward. A provision of the bill expressly guarantees that employees would be entitled to whatever tips are left for them, thereby prohibiting management from sharing in the gratuities. The measure’s effect on tip pooling is not clear.

The measure, the Raise the Wage Act, allows the increases for both tipped and nontipped employees to be adjusted by the Secretary of Labor in accordance with how the median wage of hourly workers is driven up or down by market forces. 

The bill, approved in the Democratic-controlled House on party lines, now moves to the Republican-controlled Senate, where the bill is widely anticipated to die, possibly by being shelved rather than put to a vote. If Senate leadership should schedule a vote, it would almost certainly be defeated because of the Republican majority. As the leader of the Republican Party, President Trump is expected by most observers to veto the act. 

However, both opponents and proponents of a $15 wage say Congress would be primed for passing the so-called living wage if Democrats gain control of the Senate in the 2020 elections. The threat of a veto would similarly be eliminated if Democrats capture the White House. 

“We’re celebrating the House vote today, but tomorrow, we’ll turn right back to the fight. Our eyes will be on the Senate and on President Trump,” Fran Marion, an employee of a McDonald’s in Kansas City, said in a statement released by Fight for $15. “And they’ll be on McDonald’s as well. We’re going to get McDonald’s to pay $15—and we’re going to win $15 all across the country.”

Passage of the measure by the House also increases the likelihood that a $15 minimum wage will be a key issue in the campaigning for the 2020 election.

Today’s vote follows the release last week of a Congressional Budget Office study that found at least 1.3 million jobs and possibly as many as 3.7 million would be eliminated by 2025 if the federal minimum wage was raised to $15. However, the same report found that 1.3 million Americans would be lifted out of poverty by the increase. The report indicated that raising the wage to $10 an hour would have far less of a negative impact on employment. 

“House Democrats showed that they put party politics over jobs by voting for an unprecedented wage mandate which even the non-partisan Congressional Budget Office shows could eliminate up to 3.7 million jobs,” Samantha Summers, communications director for the conservative Employement Policies Institute (EPI), said in a statement. “This bill will only hurt those it is intended to help by killing jobs and forcing businesses to close.”

The EPI ran full-page ads in a number of newspapers this morning in hopes of convincing Democrats to vote with Republicans against the $15 wage.

Want breaking news at your fingertips?

Get today’s need-to-know restaurant industry intelligence. Sign up to receive texts from Restaurant Business on news and insights that matter to your brand.


More from our partners