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LRB-1760/1
JK:cdc
2019 - 2020 LEGISLATURE
September 26, 2019 - Introduced by Representatives Brostoff, Sinicki, Anderson,
Hebl, C. Taylor, Bowen, Crowley and Fields, cosponsored by Senators
Larson, L. Taylor, Smith, Ringhand, Johnson and Carpenter. Referred to
Committee on Labor and Integrated Employment.
AB483,1,3 1An Act to amend 104.035 (3) (a) (intro.); and to create 104.035 (3) (c) of the
2statutes; relating to: incentives for paying tipped employees the minimum
3wage, not including tips.
Analysis by the Legislative Reference Bureau
This bill allows the employer of a tipped employee to retain the state sales taxes
that the employer collects during any sales tax reporting period if, during that
period, the employer establishes by the employer's payroll records that at least 5
percent of the wages that the employer pays to tipped employees is derived from tips
and that the employer pays the tipped employees not less than the minimum wage
of $7.25 per hour, not including tips. If the employer retains the taxes for any period
for which the employer cannot establish the criteria for retaining the taxes, the
employer must pay a penalty to the Department of Revenue equal to $500 for the first
violation and 200 percent of the taxes for each subsequent violation. After the third
violation, the employer is not eligible for retaining the taxes for 48 months following
the date of the violation. The same penalties apply for any subsequent period of
eligibility.
Under current law, generally, if an employer of a tipped employee establishes
that, when adding the tips received by the tipped employee to the wages paid to the
tipped employee, the tipped employee receives not less than the applicable minimum
wage (generally $7.25 per hour), the minimum wage for the tipped employee is $2.33
per hour.

For further information see the state fiscal estimate, which will be printed as
an appendix to this bill.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
AB483,1 1Section 1. 104.035 (3) (a) (intro.) of the statutes is amended to read:
AB483,2,72 104.035 (3) (a) Minimum rates. (intro.) Except as provided in par. (c) and subs.
3(4) to (8), if an employer of a tipped employee establishes by the employer's payroll
4records that, when adding the tips received by the tipped employee in a week to the
5wages paid to the tipped employee in that week, the tipped employee receives not less
6than the applicable minimum wage specified in sub. (1), (2), or (2m), the minimum
7wage for the tipped employee is as follows:
AB483,2 8Section 2. 104.035 (3) (c) of the statutes is created to read:
AB483,2,159 104.035 (3) (c) Sales tax retention program. 1. An employer of a tipped
10employee may retain the sales tax that the employer collects under s. 77.52 for the
11applicable reporting period under s. 77.58 if the employer establishes by the
12employer's payroll records that at least 5 percent of the wages that the employer pays
13to tipped employees during that period is derived from tips and that the employer
14pays the tipped employees not less than the minimum wage specified in sub. (1), not
15including tips.
AB483,3,316 2. If the employer retains the taxes described under subd. 1. for any reporting
17period for which the employer does not satisfy the conditions under subd. 1. for
18retaining the taxes, the employer shall pay a penalty to the department of revenue
19equal to $500 for the first violation of subd. 1. and an amount equal to 200 percent
20of the taxes retained for any subsequent violation. After the 3rd violation, the
21employer is not eligible for retaining the taxes as provided under subd. 1. for 48

1months following the date of the violation. If the employer establishes eligibility
2after the period of ineligibility, the penalties for 1st, 2nd, and 3rd violations apply to
3subsequent violations.
AB483,3,44 (End)
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