Senate passes minimum wage increase — with tax breaks

The Senate bill was approved on a 94-3 vote. It increases the minimum wage from $5.15 to $7.25; provides tax credits and other relief to small businesses; and upholds laws in Minnesota and other states to protect tipped workers from the "tip penalty."

Currently, federal law penalizes tipped employees – including waitresses – by only giving them a minimum wage of $2.13 an hour and requiring them to make up the difference in tips. Minnesota and other states have exercised their right to change this rule and to set the same minimum wage for tipped and non-tipped workers. The Senate bill preserves states\’ rights to decide how they want to handle the tip penalty. 

"I voted today to raise the minimum wage for working families because it is fair and smart, and above all because it is right," said U.S. Senator Amy Klobuchar, D-Minn. "Our lowest paid workers have seen the purchasing power of their wages decline even as their health care, housing, education, and energy costs skyrocket, and it is long past time that we help them make ends meet. Now that both the House and the Senate have approved this wage increase, it is up to the conference committee, and then President Bush, to act quickly so that we can make this law."

Republican Senator Norm Coleman of Minnesota also voted in favor of the legislation.

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