Rep. Horsford: Nevada is the gold standard for wages

Nevada stands out with the highest concentration of tipped workers in the nation. From the skilled bartenders crafting cocktails to the dedicated servers providing exceptional dining experiences, hospitality professionals are the backbone of the Las Vegas economy and a key reason tourists return to our state.

But what truly sets Nevada’s tipped workforce apart isn’t just world-class service — it’s the protection and respect they receive in their pay. Unlike most states, Nevada’s tipped workers earn the full minimum wage of $12 an hour, regardless of the tips they receive. Only six other states — Alaska, Minnesota, Montana, Oregon, Washington and California — offer similar protections, and some states index minimum wage increases to rises in the cost of living. In contrast, the federal minimum wage has remained stagnant at $7.25 since 2009, with Republicans repeatedly blocking efforts to raise it.

Even worse, in many states, tipped workers receive a drastically reduced hourly wage, with some earning as little as $2.13 an hour before tips. This outdated wage system, a relic from the Jim Crow era, was designed to exploit recently freed slaves by allowing employers to avoid paying them a wage.

Today, nearly 6 million American workers, representing almost 6% of the workforce, rely on tips for most of their income. A staggering 70% of these workers are women, often single mothers and women of color. Women in these roles frequently earn less in tips than their male counterparts.

If we are serious about fulfilling the promise of the American dream — where every worker can own a home, feed their family, afford child care and do it all with just one job — we must eliminate the subminimum wage and treat tips as the gifts they are.

Tips are not guaranteed income and should not be taxed. Tips are unpredictable and influenced by factors beyond workers’ control. Expecting workers to budget and plan based on uncertain income is unfair, especially when their hourly wage is as low as $2.13 an hour.

When tipped workers are not guaranteed a livable wage, they lose out on employer/employee contributions into their retirement savings and Social Security benefits, forcing them to work longer and retire without the security they deserve. It’s time to create tax policies that reward the dignity of work, not wealth, and that starts by lifting up tipped workers.

The discrepancies in our system are glaring. In Nevada, tipped workers pay federal (income) taxes on tips — income not provided by their employer but instead by customers who have already been taxed on those dollars. This is double taxation, plain and simple, and it’s unfair.

That’s why I am introducing legislation inspired by Nevada’s model. My bill, the TIPS Act, aims to eliminate federal (income) taxes on tips and ensure that tipped workers are paid a full minimum wage, abolishing the subminimum wage policy.

Nevada employers have demonstrated that this is not only possible but beneficial, and it’s time workers across the country receive the same respect and security.

I’m willing to work with anyone, from either side of the aisle, who supports tipped workers getting ahead. But let me be clear: simply raising the minimum wage for tipped workers or eliminating federal taxes on tips is not enough.

To truly support the nation’s 6 million and growing tip-earning employees, we must do both. It’s time to ensure that every worker in America has the opportunity to achieve the American dream, without being held back by an unjust and outdated wage system.

U.S. Rep. Steven Horsford, D-Nev., represents Nevada’s 4th Congressional Dstrict.