Rajesh D. Nayak, Paul K. Sonn, National Employment Law Project, August 2009

In 2007, Congress finally raised the federal minimum wage for the first time in ten years, giving millions of low-wage workers a modest raise to $7.25 per hour by 2009.1 But for millions more low-income employees like the waitress at your local diner, paychecks have not budged. Workers who rely on tips are subject to a special tipped worker minimum wage, which has remained frozen since 1991 at a meager $2.13 per hour—just $4,430 per year for a full-time worker. Congress has overlooked this little-understood part of our minimum wage system the last few times that it has increased the minimum wage. The result has been to drag down pay for tipped workers in many of our nation’s fast-growing service industries, such as restaurants, hotels, nail salons, and car washes, where millions today spend their careers. The overwhelming majority of tipped workers are adult women—many of them supporting families. They are hurt the most by the frozen tipped worker minimum wage, which is an under-appreciated factor in the unequal pay that working women continue to receive across our economy.

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