Estate Tax and Extension of Tax Relief Act of 2006 - Motion to Proceed
ESTATE TAX AND EXTENSION OF TAX RELIEF ACT OF 2006--MOTION TO PROCEED -- (Senate - August 03, 2006)
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Mrs. MURRAY. Mr. President, a question has been raised about whether the minimum wage provision affecting States that allow tips to be exempt would be impacted by the legislation that is before us. I ask unanimous consent to have printed in the RECORD a letter from Gary Weeks, who is the director of the Washington State Department of Labor and Industries, that says definitively:
Under our preliminary analysis, this proposal, in effect, appears to nullify an employer's obligation to pay the minimum wage rate in RCW 49.46.020 with regard to tipped employees. This means that Washington workers who receive tips--typically service industry workers--would see a decrease in income.
I ask unanimous consent to have that printed in the RECORD.
There being no objection, the material was ordered to be printed in the RECORD, as follows:
STATE OF WASHINGTON,
DEPARTMENT OF LABOR AND INDUSTRIES,
Olympia, WA, August 3, 2006.
Hon. PATTY MURRAY,
United States Senator,
Russell Senate Office Building, Washington, DC.
Hon. MARIA CANTWELL,
United States Senator,
Hart Senate Office Building, Washington, DC.
DEAR SENATORS MURRAY AND CANTWELL: Your office asked me to respond to an inquiry as to how the proposed HR 5970 would affect workers in the state of Washington.
As you know, Washington State does not recognize tips as part of the minimum wage. Tipped employees are entitled to the full minimum wage, currently $7.63 an hour. Additionally, Initiative 688, passed overwhelmingly by voters in 1998, tied the minimum wage to the Consumer Price Index, to be recalculated and adjusted each year.
The proposed bill, Section 402 of HR 5970, which amends the Fair Labor Standards Act to add a paragraph that states:
(2) Notwithstanding any other provision of this Act, any State or political subdivision of a State which on or after the date of enactment of the Estate Tax and Extension of Tax Relief Act of 2006 excludes all of a tipped employee's tips from being considered as wages in determining if such tipped employee has been paid the applicable minimum wage rate, may not establish or enforce the minimum wage rate provisions of such law, ordinance, regulation, or order in such State or political subdivision thereof with respect to tipped employees unless such law, ordinance, regulation, or order is revised or amended to permit such employee to be paid a wage by the employee's employer in an amount not less than an amount equal to--
(A) the cash wage paid such employee which is required under such law, ordinance, regulation, or order on the date of enactment of the Estate Tax and Extension of Tax Relief Act of 2006; and
(B) an additional amount on account of tips received by such employee which amount is equal to the difference between the cash wage described in subparagraph (A) and the minimum wage rate in effect under such law, ordinance, regulation, or order, or the minimum wage rate in effect under section 6(a), whichever is higher.
Under our preliminary analysis, this proposal, in effect, appears to nullify an employer's obligation to pay the minimum wage rate in RCW 49.46.020 with regard to tipped employees. This means that Washington workers who receive tips--typically service industry workers--would see a decrease in income. However, the proposal does give states the right to amend their laws to specifically reinstate their current minimum wage rate laws. Until and unless the Washington State Legislature amends the minimum wage act to reinstate the current wage rate provision for tipped employees, it would diminish workers' rights in Washington State.
I trust that this is useful information. Please let me know if I can be of further assistance.
Sincerely,
Gary K. Weeks,
Director.
Mrs. MURRAY. Mr. President, their preliminary analysis shows that this provision would take away the wages and reduce it dramatically for waiters and waitresses, bartenders, barbers, baggage porters, cooks, dishwashers, hairdressers, maids, manicurists, massage therapists, parking lot attendants, personal care and services workers, service station attendants, taxi drivers, and chauffeurs.
It appears, indeed, that the provision in this bill will dramatically reduce the income of thousands of workers in my State and other States.
I again reiterate that is why we are opposed to this bill.
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