TIP Improvement Act of 2026 Tipped Income Protection and Improvement...
To amend the Fair Labor Standards Act of 1938 to adjust the minimum wage for tipped workers and to amend the Internal Revenue Code of 1986 to expand and make permanent the qualified tip deduction.
HB7577, also known as the Tipped Income Protection and Improvement Act of 2026, aims to change how tipped workers are paid. The bill proposes to increase the minimum wage for workers who earn tips, like those in restaurants, and to change how employers can deduct the tips they receive from their tax bill. These changes would be made under the Fair Labor Standards Act and the Internal Revenue Code.
This bill would mainly affect workers who earn tips, such as waiters, waitresses, and bartenders, by ensuring they receive a fairer minimum wage. It would also impact employers who would need to adjust their payroll and tax reporting practices. If passed, the changes would provide better financial protection for tipped workers.
HB7577 was introduced on February 13, 2026, and referred to the House Committee on Ways and Means and the Committee on Education and Workforce. These committees will review the bill to decide the next steps in the legislative process.
