Tipped Employee Protection Act

Floor Speech

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Mr. WOMACK. Mr. Speaker, I thank Chairman Walberg for this opportunity.

Mr. Speaker, I rise in support of my legislation, the Tipped Employee Protection Act, which clarifies the definition of a tipped employee, providing long-term certainty for the service industry and, ultimately, protecting tipped employees' right to earn a living, a good living.

Mr. Speaker, our local service industry businesses, like the family- owned restaurant down the street, both reflect and shape the culture in each of our communities.

These establishments aren't just places to enjoy a good meal. They are where we foster and grow relationships. From catching up with friends to shaking hands on new business to marking some of life's biggest accomplishments--birthdays, anniversaries, graduations, and promotions. Where do we do this? We do this down at the local restaurant.

Many eateries like the ones I just described make their home in my own area of northwest Arkansas. Some of my favorites include Neal's Cafe in Springdale. By the way, I should give credit to its owner, Micah Neal, for helping provide the inspiration for the legislation that we are talking about here today. Another place is Herman's, an iconic rib house in Fayetteville.

Mr. Speaker, I could go on and on, naming some of my area's most popular restaurants. What do they have in common? To begin with they have great food, but it is the hardworking people behind the counter or taking your table order who truly make these businesses landmarks in our communities. We all have them.

The bill I stand here in support of today, Mr. Speaker, is about protecting these workers. Restaurants, most of which are small businesses, operate on very thin margins. The tip credit system is the foundation on which these small businesses operate.

The tip credit, or the tipped wage, has been part of the Fair Labor Standards Act for decades. It allows employers to pay tipped workers a base wage with tips--handsome tips, in many cases--making up the rest of those workers' earnings.

This system empowers tipped employees to maximize their earning potential. In fact, research shows that servers at full-service restaurants earn over twice--let me say it again, earn over twice--the Federal minimum wage. According to the National Restaurant Association, tipped servers nationally make a median income of $27 an hour, with the highest paid workers in the $41 an hour range.

The tip credit also offers flexibility for operators to invest in their businesses and staff. Without it, restaurant operators would be forced to make some very tough decisions, such as raising prices on their customers or reducing workers' hours, maybe even cutting jobs altogether.

Unfortunately, regulatory overreach has put the tipped credit system at risk, creating uncertainty for restaurant operators. Different administrations have issued conflicting rules and guidance, producing a regulatory roller coaster for restaurant owners and their staff. This instability makes it difficult for owners and operators to make long- term business plans. Antiworker efforts that chip away at the tipped wage altogether interfere with employees' hard-earned paychecks and livelihoods.

My bill, Mr. Speaker, the Tipped Employee Protection Act, provides a commonsense solution. It puts an end to hurtful regulatory confusion and litigation. It preserves the tipped wage and protections in the Fair Labor Standards Act. It provides clarity and simplicity in categorizing workers as tipped employees. It seeks to maintain a consistent regulatory environment.

To put it simply, my legislation will protect the hard-earned paychecks of tipped employees across the country and right at home in my Third District of Arkansas, the people who work day in and day out to put food on the tables of your favorite restaurant, as well as on their own kitchen tables at home.

This bill, Mr. Speaker, is how we deliver bigger paychecks to our constituents back home.

One other thing, Mr. Speaker. If you ever find yourself in Springdale, Arkansas, at Neal's Cafe, order some apple salad. You will thank me later.

Mr. Speaker, I support this bill, and I urge its passage.

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