"Federal and most state laws allow for employers to apply a portion of employee tips to their combined wage. For tipped workers, if the combination of base wage plus tips does not total the minimum hourly wage, the employer must pay the employee to make up the difference.
If the tip credit is removed, many restaurants will eliminate tipping and move to an hourly wage system. Tipped employees would likely earn far less than they currently do and restaurants would be forced to reduce employee hours or operate with fewer employees.
High quality tipped guest services is a hallmark of the U.S. restaurant industry.
Recent attempts to eliminate the tip credit in Chicago, Maryland, D.C., Michigan, Virginia, New Mexico and Maine were soundly defeated after many tipped workers spoke out about why they prefer the tip credit."