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SB 2408

AN ACT RELATING TO LABOR AND LABOR RELATIONS -- MINIMUM WAGES

2026 Regular Session Introduced by Tiara Mack and 3 co-sponsors

Rhode Island would raise the cash wage for tipped workers to reach at least $6.75/hour by 2027, while continuing tip credits to meet minimum wage.

05/06/2026 Committee recommended measure be held for further study
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Bill Summary · SB 2408

Bill Summary: SB 2408 (Rhode Island, 2026) – Minimum Wages

General purpose

SB 2408, introduced January 30, 2026, would adjust Rhode Island’s minimum wage framework for employees who receive gratuities. The bill specifies updated wage requirements for tipped workers and sets a schedule for increasing the cash wage amount over time. It operates within the state’s existing minimum wage statute (Chapter 28-12).

Key provisions

  • Section 28-12-5 (amended) – Employees receiving gratuities

    • The statute continues to require employers to pay tipped employees a wage that, together with gratuities, complies with the minimum wage statutes (as referenced in §§ 28-12-3 and 28-12-3.1).
    • For industries where gratuities are customary (e.g., restaurants, hotels, and similar sectors), the “allowance for gratuities” is defined as the minimum rate minus $2.89 per hour. In other words, the cash wage plus gratuities must total the applicable minimum wage, with $2.89 per hour designated as the cash wage floor when calculating the tip credit (subject to constraints below).
    • The bill outlines the required “cash wage” floor that employers must pay in order to count gratuities toward meeting minimum wage:
    • Cash wage shall be at least $2.89 per hour initially, with scheduled increases:
      • Jan 1, 2016: cash wage increases to at least $3.39/hour
      • Jan 1, 2017: cash wage increases to at least $3.89/hour
      • Jan 1, 2027: cash wage increases to at least $6.75/hour
    • Employers must provide substantial evidence of the tip credit amount used (per subsection (b)); the director of labor and training may require documentation. Employees may request a hearing on the deduction amount.
    • If wages are calculated on an incentive basis and a reasonable average employee earns at least the minimum wage, the employer is presumed compliant, regardless of the specific wage calculation method, so long as the approach is not unreasonable.
    • Special provision for full-time students under 19 employed by nonprofit religious, educational, librarial (likely “librarial” is intended as “librarial” meaning libraries), or community-service organizations: they must be paid at least 90% of the standard minimum wage. If there is a conflict with § 28-12-3.1, the higher provisions apply as governed by § 28-12-3.1.

  • Section 2 – Effective date

    • The act takes effect upon passage (i.e., it would become law immediately if signed/approved).

Who is affected

  • Employers in Rhode Island employing tipped workers in industries where gratuities are customary (restaurants, hotels, and similar businesses) will be subject to the updated tip-credit wage structure.
  • Tipped employees receive a combination of cash wage and gratuities, with the minimum cash wage rising over time to reach at least $6.75/hour by January 1, 2027.
  • Full-time student employees under 19 working for certain nonprofit or community-service organizations would receive a 90% minimum wage floor.

Timelines and procedural notes

  • The bill schedules incremental increases to the cash wage portion of tipped employees, culminating in a $6.75/hour cash wage by January 1, 2027.
  • The act would take effect immediately upon passage.
  • Employers must maintain documentation for gratuity credits and may be subject to hearings on deduction amounts.

Potential impact

  • Tipped workers would see a higher cash wage floor by 2027, reducing reliance on gratuities to meet minimum wage requirements.
  • Employers would need to adjust payroll calculations, documentation, and possibly pricing/ticketing to account for higher cash wages.
  • The policy intent emphasizes better wage security for tipped workers while preserving a tip-credit framework, with a clear phased-in schedule and oversight by the Department of Labor and Training.

Compiled from official sources — confirm details with the bill’s official record.

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