New law ‘uncouples’ state’s tipped workers from changes to federal minimum wage

Whether congressional lawmakers ever pass an increase to $7.25 federal minimum wage remains an open question. But if it does happen, New Hampshire tipped employees will not see a proportionate wage hike.

A bill signed by Gov. Chris Sununu Friday eliminates a provision pegging the state’s minimum wage for tipped employees to 45 percent of the federal minimum wage. Instead, the bill, Senate Bill 137, ties tipped employee wages to a hard number: $3.27 an hour.

Under current law, any restaurant, hotel, motel, inn, cabin, or ballroom employee who receives more than $30 a month in tips may be paid by their employer at 45 percent of the current $7.25 an hour, which amounts to $3.27. 

The new state law means that if Congress were to raise the minimum wage to $15 an hour, New Hampshire restaurants and hotel owners would not necessarily need to increase their tipped worker minimum wages by 45 percent  – or $6.75 an hour.

Rather, restaurant and hotel owners would only need to continue paying the minimum $3.27 an hour or pay the new federal “direct minimum wage,” whichever was greater. Presently, the federal direct minimum wage is $2.13 per hour.

Sponsored by Senate Majority Leader Jeb Bradley, a Wolfeboro Republican, the “uncoupling” bill was intended to create a state firewall against a federal increase to the minimum wage.

That firewall is designed to protect restaurants and other businesses from sudden payroll increases brought on by Congress, Bradley said. 

Representatives from the New Hampshire Lodging and Restaurant Association urged the bill’s passage, arguing that at a time when restaurants have already had to increase wages to non-tipped employees amid a national shortage of workers, a mandatory wage hike for tipped workers would deal a double financial blow. 

But Democratic lawmakers said the bill would undermine national efforts to raise the minimum wage, after Republican lawmakers and Sununu have voted down or vetoed Democratic efforts to raise the state’s minimum wage to $12. 

The new law takes effect only if Congress actually raises the federal minimum wage and a president signs that hike. In the meantime, the state’s 45 percent rule will remain in effect.