GOP Spikes Legislation Widening Tipped Worker Wage Loophole (2)

House Republican leaders yanked votes on two labor bills, including one expanding which tipped workers earn below minimum wage, after swing-district lawmakers delivered a surprise defeat to Speaker Mike Johnson (R-La.).

The House on Tuesday failed to pass the Flexibility for Workers Education Act (H.R. 2262), under which employers would be able to hold voluntary job-related trainings after hours without compensating employees if the training took place outside the worker’s normal hours. The measure was killed by six Republican members joining House Democrats opposing it on the floor.

After the defeat, the House pulled consideration of another piece of legislation that would have expanded the number of workers paid below minimum wage because they earn tips.

House Republicans’ razor-thin majority is even slimmer this week, with one Republican recovering from surgery and another caring for his wife away from Washington. The GOP majority recently lost Rep. Doug LaMalfa (Calif.), who died unexpectedly, and Rep. Marjorie Taylor Greene (Ga.), who resigned.

A fourth bill that would largely bar 401(k) and pension fund managers from considering environmental, social, and governance factors in making investment decisions was also removed from the Wednesday schedule set by the majority leader’s office.

Johnson said following the vote that he was “not deterred” by the outcome and would rework the bills with members.

“We’re totally in control of the House,” he said. “The two bills, they were kind of sort of a package of issues, and so we’ll work on those two bills together.”

Proponents of the workers education bill claimed it would incentivize companies to extend training to overtime-eligible employees but House Democrats opposed it, arguing it doesn’t contain sufficient safeguards to keep employers from pressuring workers into activities without fair compensation.

The Republicans who opposed the bill included some of the most politically vulnerable swing-district incumbents in the House, and a number of populist conservative hardliners. Among those who rejected the bill were Republican Reps. Chris Smith (N.J.), Riley Moore (W.Va.), Nick LaLota (N.Y.), and Rob Bresnahan (Pa.). The lawmakers didn’t immediately respond to requests for comment.

Read More: BGOV Bill Analysis: H.R. 2262, Unpaid Employer Job Training

The Tipped Employee Protection Act (H.R. 2312) would have broadened who can be paid as little as $2.13 per hour if they also make tips. Under the measure, a tipped employee would be anyone who receives any amount of tips over a range of time periods. It would replace the current standard which marks a tipped employee by whether they “customarily and regularly,” receive tips of more than $30 a month.

The vote came as the Trump administration highlights how a Republican-led tax law passed last year offered new tax breaks to people earning tips and on overtime pay for some workers.

The legislation would have codified elements of a 2020 Trump administration rule that abandoned a prohibition on employers paying the reduced minimum wage for tipped workers who spent more than 20% of their time performing nontipped duties, known as the 80/20 rule.

Read More: BGOV Bill Analysis: H.R. 2312, Tipped Employee Definition

The Labor Department under President Joe Biden reversed the Trump-era 80/20 rule but a federal appeals court vacated the regulation in 2024.

The legislation would end the regulatory back-and-forth over the issue, House Republicans said in the measure’s committee report.

“The bill creates a clear, common-sense definition of a tipped worker and prevents future attempts by misguided, activist judges and bureaucrats seeking to implement policies that hurt workers’ bottom lines,” said Rep. Mark Walberg, chairman of the House Education and Workforce Committee, during floor arguments Tuesday.

Democrats have argued that workers who only sporadically receive tips, such as hotel maids, would be at risk of losing income by being classified as a tipped worker. The bill was voted out of committee in a 19-15 vote in November.

Read More: BGOV Bill Analysis: H.R. 2270, Child and Elder Care Overtime

The second spiked bill, the Empowering Employer Child and Elder Care Solutions Act (H.R. 2270), would have excluded the value of child care payments and subsidized services from an employee’s regular rate, which is used to calculate their overtime pay. Under the FLSA, eligible workers are owed 150% of their regular rate for time worked in excess of 40 hours per week.