LB400 was introduced in the Nebraska Unicameral, in January of this year to raise the minimum wage of tip earners. The current minimum wage in Nebraska for tip earners is $2.13 an hour with restaurants ensuring tipped staff obtain at least $9.00 per hour combined standard wage and tips. The bill was to raise the minimum wage to $4.50 an hour, without indexing the wage to the regular minimum wage.
The bill includes raises the following questions to assure compliance with wage laws:
- Are the restaurants actually ensuring that the employees receive the $9.00 an hour combined standard wage plus tips or are they “gaming” the system to ensure more profits for the company?
- Can the employees genuinely rely on the tips of the patrons?
- Can “standard tips” accurately be reflected in the $9.00 per hour combined minimum standard wage plus tip?
As business owners, employers should consider reviewing current pay policies, including the often-used practice of tip pooling and/or tip splitting, in order to remain in compliance. Another compliance approach to consider would be the modification and reclassification of employees to non-tipped personnel.
The legislation is not finalized so there will be updates on the status of this bill.