Biden In His Own Words: Tipping over the Tipped Minimum Wage

By Tim Kennedy

This past Labor Day, Democratic Presidential Nominee Joe Biden reaffirmed his commitment to raise the minimum wage to $15 per hour. His proposed campaign promises for American workers didn’t stop there. Biden also pledged as president to, “end the tipped minimum wage.” However, unbeknownst to many, Biden has flip flopped on the issue throughout his career. While serving in the US Senate and as vice president, Biden supported policies that widened the gap between tipped and minimum wage workers.

Many of America’s labor practices, such as the federal minimum wage, are outlined within the Fair Labor Standard Act (FLSA) of 1938. Throughout the years, the FLSA has been amended numerous times. Generally, with each change the federal minimum wage has risen. Originally set at $0.25 per hour in 1938, the federal minimum wage increased throughout the decades and currently hovers at $7.25 per hour. However, the law has historically applied differently to tipped workers, typically servers and bartenders.

Prior to 1966, tipped employees were paid the full federal minimum wage. However, an amendment passed that year change this practice. From that point forward, tipped employees were paid a subminimum wage. These cash wages were 50 percent of the prevailing minimum wage. In practice, bartenders and servers made up the difference through their tips. This also led to the establishment of the Tip Credit system. Should a tipped employee’s total hourly income (subminimum wage plus tips) equal less than the minimum wage, the employer is responsible to compensate for the difference. This system continues to be practiced widely throughout the US service industry. In 1996, the FLSA was amended once more, this time altering the subminimum wage regime.

Instead of allowing subminimum wages to rise with the increasing value of the federal minimum wage, tipped employees’ hourly wages were capped off at a minimum of $2.13 per hour. Joe Biden voted yes to the 1996 bill. Why is Biden only now interested in eliminating the tipped minimum wage system given that he supported the practice while serving in the Senate? Is it just his campaign’s attempt to appeal to American workers, especially those within the service sector? This is not the last time that Biden changed his outlook towards the service industry.

In 2011, the Department of Labor (DOL), under the direction of the Obama-Biden Administration, barred back-of-house employees, such as cooks and dishwashers, from participating in tip pools with front-of-house staff. This was a blow to many back-of-house employees, especially dishwashers, who in 2012 made 9.4 percent less annually than waiters and waitresses. In 2018, the Trump Administration revoked this decision and together with Congress passed legislation that prohibited employers from pocketing employee earned tips.

With the election now fewer than 60 days away, people must separate what Biden promises from his actual track record.

Order Newt’s Latest Book: