HB133 could save tipped employees hundreds, if not thousands, of dollars annually in lost wages, approved by Texas House, says Rep. Canales

New Bill could save tipped employees thousands in lost wages

House Bill 133, which would prohibit an employer from keeping any portion of a gratuity paid to or left for a tipped employee – potentially saving such workers hundreds and possibly thousands of dollars a year in lost wages – has been approved by the Texas House of Representatives, according to Rep. Terry Canales, D-Edinburg.

“House Bill 133 would ensure all of our service industry workers who receive tips from customers get to keep all of those tips,”

“Most Texans have no idea that when they include a tip on a credit card, many restaurants use part of that gratuity (tip) to pay the transaction processing fees which should be the responsibility of the business. With an estimated 15 percent of waiters and waitresses living in poverty, we must work to ensure that service industry workers are protected from this practice.”

Rep. Terry Canales, D-Edinburg

A “tipped employee” as an employee engaged in an occupation in which the employee customarily and regularly receives more than $20 a month in tips.

“Every time a business is paid with a debit card or credit card, that firm must pay a fee for that financial service,”

“But for waitpersons in restaurants – those professionals who provide excellent service and depend on gratuities to make a living – it is unfair if employers pay that fee from the worker’s tips.”


Rep. Terry Canales, D-Edinburg

Canales, who also serves as Chairman, House Committee on Transportation, is the main author of HB 133, which was approved by the full House on Wednesday, May 1, 2019, by the following vote: 88 Yeas, 54 Nays, 2 Present, not voting.

HB 103 still must be approved by the Texas Senate and by Gov. Greg Abbott before the end of the current regular session of the Legislature, which winds up on Monday, May 27, 2019.

Rep. Ana-María Ramos, D-Richardson, and Rep. John H. Bucy, III, D-Austin, are joint authors of HB 133.

Concerns have been raised regarding the ability of an employer to collect “swipe fees” from a tipped employee for tips paid with credit or debit cards, according to the House Research Organization, which is the nonpartisan arm of the House of Representatives.

“Today, employers – not all, but many – make the employee cover the ‘swipe fee’ which runs between one percent and three percent of the tip,”

“Why should an employee have to foot the bill for the owners’ costs of doing business, especially, when the employee didn’t have any say in the choice or negotiation of those fees? HB 133 simply prevents an employer from passing along these fees to a tipped employee and makes sure an employer cannot take any part of the gratuities paid to the employee to cover swipe fees.”

Rep. Terry Canales, D-Edinburg

It has been noted that, while each such fee may be small, they can quickly add up for a tipped employee. HB 133 seeks to address these concerns by prohibiting an employer from collecting or receiving any portion of a gratuity paid to or left for a tipped employee.

The House District 40 lawmaker added when he first filed legislation on this issue four years ago, 15 percent of the nation’s 2.4 million waiters and waitresses lived in poverty, compared with seven percent of all other employees.

“Waiters and waitresses, who have many responsibilities which require multi-tasking skills, play a key role in the success of a restaurant, and they have my utmost respect,”

“I do not know how many Texas restaurants are taking money away from tips using this practice, but when my legislation becomes law, this injustice will be put to an end.”

Rep. Terry Canales, D-Edinburg

According to supporters of Canales’ legislation, HB 133 would ensure that tipped employees kept all the tips they had worked to earn, including the swipe fee that some employers currently deduct when customers pay using a credit card or debit card. The decision to accept cards is up to the business, so the business should bear this cost.

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Rep. Terry Canales, D-Edinburg, who is the Chair of the House Committee on Transportation, represents House District 40 in Hidalgo County, which includes portions or all of Edinburg, Elsa, Faysville, La Blanca, Linn, Lópezville, McAllen, Pharr and Weslaco.

He may be reached at his House District Office in Edinburg at (956) 383-0860 or at the Capitol at (512) 463-0426. For more on this and other Texas legislative news stories which affect the Rio Grande Valley metropolitan region, please log on to Titans of the Texas Legislature (TitansoftheTexasLegislature.com)