Stimulus Package Allows Restaurants Owners to Pay Workers’ Tips

The restaurant industry will be able to pay employees the equivalent of cash tips via loans from the coronavirus stimulus package. 

There are as many as 15.6 million restaurant workers in the U.S. at risk of losing their jobs as Americans are encouraged to stay indoors and refrain from dining out. Many of these workers make as little as $12.49 per hour and rely on tips to pay the bills, per Business Insider. 

Restaurant owners can use the federal stimulus loans to pay workers hourly wages plus tips, according to the report. Treasury Secretary Steve Mnuchin said Monday that the loans should be available by the end of this week. Employers who have already laid off staffers can still apply for the loans if they rehire the workers who were released before the end of June. 

Restaurant owners could alternatively apply for the payroll tax-relief program, which allows them to defer payroll taxes in an effort to save money. However, owners must choose between the loans or the tax relief as they are not eligible for both.