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Bill

HB 1623

Prohibiting deductions for credit card transaction processing fees from employee tips.

2025-2026 Regular Session Introduced by Steve Bergquist and 26 co-sponsors

Washington bill prohibits deducting credit card processing fees from employee tips, ensuring workers receive full tip amounts customers provide.

House Rules "X" file.
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WeVote Research Nonpartisan
Bill Summary · HB 1623

Legislative bill overview

HB 1623 prohibits employers from deducting credit card processing fees from employee tips in Washington state. The bill protects the full value of tips by preventing businesses from reducing tip amounts to cover transaction costs associated with card payments.

Why is this important

Tips are often considered earned wages by workers, and deducting processing fees directly reduces take-home pay for service industry employees. This protection ensures workers receive the complete tips customers intend to give them, addressing a practice that can significantly impact lower-wage workers' compensation.

Potential points of contention

  • Business cost impact: Restaurants and service businesses argue that processing fees are legitimate operating costs and should not be absorbed entirely by employers, potentially affecting profit margins or forcing other cost-cutting measures
  • Practical implementation: Questions about how businesses would recoup processing fees (through menu price increases, reduced hours, or other mechanisms) and whether costs would ultimately shift to consumers or workers through other means
  • Scope and fairness: Debate over whether this regulation unfairly singles out one industry cost while allowing other business expenses to potentially affect wages, or whether tips deserve special protected status distinct from regular compensation

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

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