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The New Jersey Restaurant and Hospitality Association (NJRHA) rallied a remarkable turnout this week at the State House, where more than 150 restaurant operators, employees, and hospitality advocates packed the room to oppose A5433 – a proposal to eliminate the tip credit system in New Jersey. Originally scheduled for a vote in the Assembly State and Local Government Committee on Thursday, April 10, the bill was changed to a discussion-only hearing.
“Our industry showed up in full force because we know what’s at stake,” said Daniel Klim, NJRHA President and CEO. “This bill could seriously disrupt a system that works – for both workers and businesses. It would raise costs, limit opportunities, and ultimately hurt the very people it’s meant to help. We were proud to stand side-by-side with the hardworking restaurant workers and operators.”
In New Jersey, tipped employees receive a minimum hourly cash wage of $5.62. If the minimum cash wage plus the tips received by an employee do not equal at least the full state minimum hourly wage of $15.49, current law mandates employer must pay the employee the difference.
As a result, a tipped employee's total earnings must meet or exceed the state minimum wage. Many tipped employees, however, report earning far above the minimum wage when tips are factored in.
“We’ve already seen the impact of eliminating the tip credit in Washington D.C.,” said Amanda Stone, NJRHA Vice President of Public Affairs. “This policy forces operators to absorb significant payroll increases, leading to higher menu prices, fewer shifts, job losses, and unwanted changes to service models that negatively affect both customers and staff. We can’t afford to let this happen in New Jersey.”
The NJRHA coordinated outreach efforts ahead of the hearing, mobilizing a broad coalition of stakeholders who rely on the tip credit model. Attendees shared personal stories, economic data, and firsthand experience, all to highlight the unintended consequences of the proposed legislation.
Those who testified included longtime servers, small independent restaurateurs, national chain representatives, and even hospitality students. Many warned that similar policy shifts in other states and cities have led to restaurant closures and reduced income for staff.
“It’s about preserving a system that works – for everyone in the industry,” Klim said. “The truth is, servers are satisfied with the current model and aren’t the ones calling for this change. The NJRHA remains committed to championing policies that support fair wages, sustainable business practices, and continued opportunity within New Jersey’s third-largest private sector employer.”
Listen To The Full Hearing
Listen to the full Assembly State and Local Government hearing by clicking here. Discussion on A5433 can heard starting at the 32:30 minute mark.
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