April 14, 2017

Debate continues over the tip credit portion of the Minimum Wage Law by Lorraine Glowczak

With the recent passage of the Minimum Wage initiative, Question 4 on the November ballot, restaurant owners and wait staff across the state, including those in the greater Windham area, have actively reached out to their law makers expressing concern regarding the tip credit portion of the legislation.

Becky Crittenden of Cole Farms Restaurant
In a recent, “Speak to your Legislator” public forum hosted by the Sebago Lakes Region Chamber of Commerce, owner of Cole Farms Restaurant and Pub in Gray, Brad Pollard, expressed his concern regarding the new law and its effect on his wait staff.  The Minimum Wage initiative that passed in November is having a harmful effect on the wait staff’s wages,” he began. “I am presently working with my staff as they discuss this issue with their legislators. This is going to continue to affect them in very devastating ways if things do not change.”

Briefly, when the Minimum Wage initiative passed in November, it raised the minimum wage from $7.50 an hour to $12 by 2020. This included a raise in the subminimum wage for tipped employees. This raises the minimum wage for service workers who receive tips from $3.75 an hour to $5 an hour in 2017. By 2024, service industry workers would be paid a minimum hourly wage of $12 under the new law.

The concerns among a vast majority of tipped workers say they often make above and beyond this hourly wage. “We are already beginning to see a decrease in our tips,” stated, Becky Crittenden of Cole Farms Restaurant and Pub, a 35-year veteran in the service industry and a single mother. “The other day, one of my customers thought I was already making $12.00 an hour.”

Other concerns include the ripple effect this will have on the customer. “Realistically, we have to change our prices to accommodate the minimum wage change,” explained Sam (Samantha) Clapp, manager, wait staff and hostess at Rose’s Italian Restaurant in Windham. “Although our portion sizes are huge and the high quality of our food remains the same, we will have to pass on the increase of costs required by the Minimum Wage Law on to our customers, which will make for a lot of unhappy Mainers.” 
Sam Clapp at Rose’s Italian Restaurant

Wendyll Caisse, owner of Buck’s Naked BBQ, reiterated Clapp’s sentiments. “In 2024, thanks to the removal of the tip credit, labor would be at 49 percent at full service restaurants, putting total expenses at 120 percent of sales in one of the most elastic, economic-demand industries there is,” explained Caisse. “No restaurant can continually operate at a loss. The prospect of cutting jobs or raising prices by 40 percent, are not good answers, but reinstating the tip credit is.”

Receiving a large amount of complaints, Senator Roger Katz has proposed a bill, L.D. 673, in an act to restore the tip credit to Maine’s minimum wage law. The law is co-sponsored by Senator Bill Diamond of Windham. 

Approximately two months prior to the election in November, Senator Diamond began to receive calls from those employed in the food service industry regarding the Minimum Wage Law. “The more I met and spoke with them, the more concerned I became about how the law would affect individuals in that industry,” explained Senator Diamond. “Most of the people I spoke to and who shared the most concerns with me came from single women.”

Through his own in-depth research on the Question 4 initiative, Diamond’s concern turned to action, at which point he decided to co-sponsor the bill, L.D. 673.

Diamond said that all the individuals who he spoke with, shared their own sincere and well thought out reasons as to why they want the tip credit reestablished.  In regards to studies that have indicated positive outcomes for raising the subminimum wage, their stories are all the same. “I am living the life. I can’t take the risk based upon someone else’s study,” Diamond said of their general responses.

Mike Tipping, Communications Director at Mainers for Fair Wages, an organization that is a proponent of the Minimum Wage law and raising the subminimum wage for tip workers, states that there is unfortunate fear and misinformation surround this issue. “Voters approved the change overwhelmingly, it’s phased in slowly over the next decade with lots of time for evaluation, the preponderance of evidence shows it will help workers and the restaurant industry and it deserves time to be allowed to work.” Tipping said.

According to the Fair Maine Wage website, the raise in subminimum wage works well in seven other states (Alaska, California, Minnesota, Montana, Nevada, Oregon and Washington) where wait staff make the regular minimum wage, plus tips and the menu prices are no higher than in other states. The website also states that there are many reasons to end the unfair subminimum wage for workers who get tips. These include unpredictable earnings and sexual harassment.

A recent letter editorial published in The Portland Press Herald mentioned that the tip credit initiative is not a good deal for everyone, reminding the reader that not all servers work in high-end eateries where tips are based upon more expensive entrees. www.pressherald.com/2017/04/09/our-view-maine-lawmakers-should-study-tipped-wage-not-cut-it/

Obviously, there are always two sides to every story, each a valid perception to be considered. The trick is finding the position that works the best for everyone. Diamond stated it more succinctly, “[Finding a way] to support the greater good that doesn’t

1 comment:

  1. Please remember that the Restaurant Workers of Maine is a grassroots organization of over 5,000 UNPAID restaurant workers and restaurant owners who are in favor of raising the minimum wage but want the tip credit restored. It is ONLY the elimination of the tip credit portion of the law that may harm servers and small businesses and should be fixed. Also the "subminimum wage" is a term that applies only to mentally or physically handicapped workers. Did you know all servers make at least minimum wage? If the hourly pay plus tips does not meet or exceed minimum wage the restaurant owner must make up the difference. This almost never happens because most servers make far more than minimum wage.