The Ohio tip credit continues as the $15 minimum wage movement dies

Joanna Fantozzi

Policy advocacy organization, One Fair Wage — which started a movement to get a state constitutional amendment passed in Ohio that would raise the minimum wage to $15 an hour and eliminate the tip credit — has failed to get enough signatures to get its proposal on the ballot this November.

The failed constitutional amendment would have raised the Ohio minimum wage to $12.75 an hour on Jan. 1, 2025, and then it would have gone up to $15 an hour on Jan. 1, 2026. The subminimum wage, also known as the tip credit, would have also been eliminated if the proposal had passed.

The tip credit is a hotly debated topic between labor advocates and business owners and allows the hospitality industry to pay tipped workers below the legally mandated state or federal minimum wage and make up for the rest of the paycheck with presumed gratuity. As of 2024, seven states have eliminated the tip credit: Alaska, California, Minnesota, Montana, Nevada, Oregon, and Washington. Chicago and Washington, D.C. have also eliminated the subminimum wage for tipped workers. Other states have a more complex approach to the rule, with New York State eliminating the tip credit for some like car wash workers and nail technicians, but not for hospitality workers.

Related:Tip credit is eliminated in Washington, D.C.; another state passes a $15 minimum wage

The tip credit is largely supported by the hospitality industry, while advocacy groups like One Fair Wage, have contested that the subminimum wage encourages sexual harassment, and is a “legacy of slavery.” The Ohio Restaurant & Hospitality Alliance saw the failure to get these wages on the ballot as “a victory for Ohioans and Ohio’s restaurant and hospitality community.”

“The voice of Ohio restaurant and hospitality professionals is crystal clear – ‘Don’t mess with our tips,’” John Barker, president and CEO of the Ohio Restaurant & Hospitality Alliance, said in a statement. “Maintaining the tipped wage allows restaurant operators to avoid being forced to raise menu prices and eliminate positions, which keeps Ohio’s hospitality community vibrant for Ohio towns, villages, and neighborhoods and for guests visiting their favorite eateries.”

The industry organization noted that in a survey commissioned by the Ohio Restaurant & Hospitality Alliance, 91% of tipped workers (among 990 servers, bartenders and other tipped staff) agree that the current tipping system works well for them and 85% believe in the ability to maximize tips through providing excellent customer service.

Although One Fair Wage failed to get this measure on the Ohio ballot this year, the organization could try for the 2025 election season instead, if they could enough signatures.

Related:Labor department sets limits on use of tip credit for server side work

Contact Joanna at [email protected]