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Seven states (including DC) have already eliminated the tipped minimum wage. In 2024, ballot measures in Washington DC and several states moved further in this direction. A 2026 enactment would extend the geographic reach of one-wage-rate laws and intensify the national debate about tipping culture.
The tipped minimum wage allows employers in most US states to pay tipped employees a subminimum wage, typically $2.13 per hour federally, with the expectation that tips will bring total compensation to at least the standard minimum wage. Seven states and DC already require employers to pay the full state minimum wage regardless of tips. Ballot measures and legislative efforts to extend this model have accelerated.
The federal tipped minimum wage has been $2.13 per hour since 1991, among the most stagnant wage policies in American labor law. States are free to set higher tipped minimum wages, and many have done so. Seven states, including California, Oregon, Washington, Minnesota, Alaska, Montana, and Nevada, have eliminated the tipped subminimum wage entirely, requiring all workers to be paid the full state minimum wage regardless of tip income.
In 2024, voters in Washington DC approved an initiative (Initiative 82) phasing out the tipped subminimum by 2027. Similar measures have been proposed in other states including Illinois, Michigan, and Florida, where the restaurant industry has historically been a powerful opponent of wage floor increases.
The political dynamics in 2026 depend heavily on which states have active ballot initiative processes and whether labor advocates can secure sufficient signature counts for ballot qualification. The restaurant industry, through the National Restaurant Association and state affiliates, consistently opposes these measures, arguing that elimination of the tipped subminimum leads to menu price increases and reduced employment.
For a YES resolution, a state must enact a complete elimination of the tipped subminimum wage, not merely an increase in the tipped minimum to a level still below the standard minimum. Partial increases or phased schedules beginning after 2026 would not qualify.
YES if any US state enacts a signed law or certifies a ballot measure result eliminating the tipped subminimum wage (allowing employers to pay tipped workers below standard minimum wage) in calendar 2026. NO if no state enacts such a change.
Seven states, including California, Oregon, Washington, Minnesota, Alaska, Montana, and Nevada, plus Washington DC, require employers to pay all workers, including tipped employees, the full state minimum wage.
Washington DC voters approved Initiative 82 in 2022, phasing out the tipped subminimum wage by 2027. The implementation has been closely watched by labor advocates and restaurant industry groups as a real-world test of the policy's effects on restaurant employment and pricing.
The National Restaurant Association argues that eliminating the tipped subminimum forces restaurants to increase menu prices significantly, reduce hours, or both, ultimately harming employment levels and consumer value. Research on the policy's effects is mixed.
States with active ballot initiative processes and strong labor advocacy organizations are most likely. Illinois, Michigan, and Florida have had active legislative and initiative debates on this topic. A conservative legislature is unlikely to pass elimination without a ballot mandate.
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