Federally-Mandated Pay Decrease

Minimum wage hikes remain a hot issue in states, but as you probably know, Congress looks likely to approve the first national increase in nine ...
by | August 2, 2006

Paycheck_1 Minimum wage hikes remain a hot issue in states, but as you probably know, Congress looks likely to approve the first national increase in nine years. One provision will bother workers in some states, however.

Federal law sets the minimum wage for tip workers at $2.13 an hour, plus tips. But in seven states, tips don't count toward the total minimum wage. Restaurants and other employers in industries where tips are pro forma still have to pay the regular amount -- $6.75 in California, for instance. The new bill would override those states' policy.

"This bill would slash the salaries of thousands of workers. I strongly oppose it," said California Senator Dianne Feinstein. The Board of Supervisors in San Francisco, where the minimum wage is indexed to inflation, passed a resolution Tuesday bemoaning the effort.

It does look like another example of Washington politics trumping the idea of federalism.

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