A Democratic bill with 1 Democratic cosponsor · See the cosponsor
Last activity — Referred to the Committee on Ways and Means, and in addition to the Committee on Education and Workforce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
In committee
Introduced and handed to a committee in the chamber it started in.
The committee holds it, and most bills are never heard from again. A hearing or a committee vote would be news; silence is the usual outcome, and it kills the bill without anyone voting against it.
Its path through Congress
- Introduced
- In Committee
What this bill would do
This bill is known as the Tipped Income Protection and Improvement Act of 2026, or the TIP Improvement Act of 2026. It adjusts the minimum wage requirements for tipped workers under the Fair Labor Standards Act of 1938. The bill requires that tipped employees be paid the standard minimum wage and allows them to keep all their tips, while still permitting standard tip pooling. It updates penalties for employers who unlawfully keep or use employee tips. Additionally, the legislation amends the Internal Revenue Code of 1986 to expand and make permanent the qualified tip deduction.
Yes· 3 of 17
- Scored +8
Would households on low incomes be better off under this?
Significantly improves baseline earnings and tax treatment for lower-income workers who rely on tips.
- Scored +8
Does this raise the lowest wage an employer may pay?
The bill requires employers to pay tipped employees the standard minimum wage instead of a lower subminimum wage.
- Scored +7
Does this cut taxes for middle-income families?
The bill expands and makes permanent the qualified tip deduction for workers, providing ongoing tax relief for middle-class individuals who receive tips.
The opposite
- Scored -3
Would business owners be better off under this?
Employers face stricter minimum wage requirements and heightened penalties for unlawfully keeping tips.
Who it would affect, and how
Potential Positive Impacts for People
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Section 2(a) requires employers to pay tipped employees the standard minimum wage and ensures workers keep all their tips, which could mean more reliable baseline pay for service workers.
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Section 2(a) explicitly allows tip pooling among employees who customarily and regularly receive tips, which can help support fair sharing of gratuities among service staff.
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Section 2(b) updates penalties to hold employers accountable for the sum of all tips unlawfully used or kept by the employer, which protects workers from wage theft.
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Section 3(a) increases the deduction limit for joint returns under the qualified tip deduction, offering potential tax relief for married couples.
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Section 3(d) treats automatic gratuities as qualified tips for individuals in hospitality, food and beverage service, or cosmetology, which expands tax benefits for workers who receive mandatory or suggested service charges.
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Section 3(e) makes the qualified tip deduction permanent, ensuring long-term tax relief for working people who rely on tips.
Potential Negative Impacts for People
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Section 3(b) prevents individuals from claiming tip deductions on amounts paid by a related person or from a business where the individual has an ownership stake, which could close tax benefits for certain small business worker-owners or family arrangements.
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Section 3(c) requires individuals to include a taxpayer identification number on their tax return to qualify for the deduction, which adds a strict compliance requirement that could burden individuals lacking proper documentation.
Groups and Interests Ranking
Every group the model scored this bill for, from -10 to +10. Tap or hover a score for the reason it gave.
- Demographic And Interest Groups
- Would households on low incomes be better off under this? — Significantly improves baseline earnings and tax treatment for lower-income workers who rely on tips. Would middle-income households be better off under this? — Offers permanent tax deductions and higher tip protections for middle-class service workers. Would students be better off under this? — Many students working part-time in restaurants and service industries will receive standard minimum wages. Would women be better off under this? — Women make up a substantial portion of the tipped workforce in restaurants, hospitality, and cosmetology. Would people in their twenties and thirties be better off under this? — Many young adults work in entry-level tipped positions in food, beverage, and hospitality industries. Would people in middle age be better off under this? — Middle-aged service and hospitality workers benefit from standard minimum wages and tax deductions. Would men be better off under this? — Male workers in tipped professions also benefit from higher base wages and tax deductions. Would Black Americans be better off under this? — Minority workers heavily represented in the service and hospitality sectors stand to benefit from wage and tip protections. Would Hispanic Americans be better off under this? — Hispanic workers employed in service, restaurant, and cosmetology professions will see improved baseline pay and tax relief. Would people in cities be better off under this? — Urban areas with high concentrations of restaurants, bars, and hospitality venues will see increased worker earnings. Would immigrants be better off under this? — Immigrants working in hospitality and service jobs may benefit from wage protections, though TIN requirements apply for tax deductions. Would business owners be better off under this? — Employers face stricter minimum wage requirements and heightened penalties for unlawfully keeping tips.
- Economy And Finance
- Does this raise the lowest wage an employer may pay? — The bill requires employers to pay tipped employees the standard minimum wage instead of a lower subminimum wage. Does this cut taxes for middle-income families? — The bill expands and makes permanent the qualified tip deduction for workers, providing ongoing tax relief for middle-class individuals who receive tips. Is this likely to grow the economy? — Increasing baseline pay and permanent tax deductions for service workers can boost consumer spending power.
- Social Issues And Justice
- Is this likely to lift people out of poverty? — Higher baseline minimum wage requirements and tax deductions for tipped workers help reduce poverty among low-income service workers. Does this narrow the gap between how men and women are treated? — Many tipped service and hospitality workers are women, who may benefit from improved baseline wages and tip protections.
- Governance And Ideology
- Does this give the federal government more power? — The bill increases federal labor standards by amending the Fair Labor Standards Act.
- 10/13/2026
- 1 Cosponsor added.
- 2/13/2026
- Referred to the Committee on Ways and Means, and in addition to the Committee on Education and Workforce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
- Introduced in House
Hillary ScholtenDemocrat · Michigan