Potential Impacts of a Full Minimum Wage for Tipped Workers in Massachusetts

Currently, Massachusetts’ law allows employers to pay tipped workers a subminimum wage of $6.75 per hour, and tips from customers are supposed to bring the worker up to the state’s full minimum wage of $15.00. If tips fall short, workers often carry the burden of asking their employer to make up the gap; this feature makes tipped workers particu­larly vulnerable to being under-paid, a form of wage-theft. The state’s November 2024 ballot includes a proposal to eliminate this subminimum wage by 2029. In this brief, we describe the Massachusetts workers who will be directly affected by this proposal and consider the existing evidence on how this policy change could impact job quality, employment, business costs, and prices. We find that: (1) tipped workers are disproportionately women and people of color; (2) tipped workers are concentrated in the hotel and restaurant industry, sectors that have incurred a disproportionate share of workplace violation complaints related to wage theft; (3) tipped workers typically earn more in states with no subminimum wages, and (4) the business cost increases from this measure can be expected to be modest. It is therefore unlikely to reduce employment or produce large price increases.