Observations on LB400
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.
