This afternoon, a Council committee will vote on a proposal to raise the minimum wage in D.C. to $11.50 by 2016. Not included in a report on the bill is a specific recommendation for raising the tipped minimum wage from $2.77. D.C.’s restaurant industry argues that, because of the tipped credit, many workers earn more than the regular minimum wage and that the current system works well.
Below is an op-ed by Ari Weisbard, deputy director at the Employment Justice Center, on what the restaurant industry gets wrong about the tipped minimum wage debate. A open letter to the Council by the Restaurant Association Metropolitan Washington can be read here.
Today, the D.C. Council will likely consider how much to raise the District’s minimum wage, which is currently $8.25 an hour for most workers and $2.77 an hour for tipped restaurant workers. Restaurant industry lobbyists have been arguing that tipped workers should not receive any increase from $2.77.
If you’ve never worked in the restaurant industry, you might be unfamiliar with how the tipped minimum works. And even those who do are often surprised about it. Under law, restaurants are supposed to make up the difference to $8.25 per hour if tips fall short over a work week. However, very few managers make employees aware of this wage provision or establish a token procedure for checking whether tips were adequate. It’s especially important for tipped employees like bussers or bar backs, who only receive a percentage of patron tips.
While corporate restaurant industry lobbyists like the Restaurant Association of Metropolitan Washington try to focus attention on the small number of waiters at high-end restaurants who earn $20 or more an hour, actual data from the Census show that most tipped workers in D.C. earn less than $10 an hour.
Recent coverage of this debate helped illustrate how outraged customers are about restaurants paying their employees these obscenely low wages and failing to offer paid sick days. But it is also important to see this issue from the point of view of workers themselves.
At the D.C. Employment Justice Center, where I am an attorney, we provide free legal advice to low-wage workers. These workers, most of whom earn little more than $8.25 an hour on the good weeks – and less than minimum wage on the bad ones – are much more typical of the industry. Tips are unsteady, particularly for busboys, food runners and bar backs, who receive only a small share of the tips waiters receive, and for waiters at less expensive restaurants.
While in theory restaurants are supposed to pay workers more than $2.77 if their tips are too low to bring them up to the full minimum hourly wage, very few managers volunteer to follow this requirement. And in an industry where managers can cut hours or threaten to fire “squeaky wheels” who complain, our clients are justifiably concerned about having to start a conversation with their managers about the law when their tips fall short for a shift.
For example, Anna, who lives in Ward 2 and worked in a restaurant in Adams Morgan, told us about how when there was a slow week or when she was charged for someone walking out without paying for a meal, she could earn as little as $30 in tips after working a 10 hour shift. With all of her $2.77 paycheck for each hour going to taxes most months, this left Anna in quite a lurch when it came time to pay for rent, groceries, and utilities. She had to rely on friends for loans and cut back on buying expensive food like fresh produce.
The situation for workers like Anna is made even worse by the lack of enforcement of wage laws here in the District. The DC government funds only four investigators to deal with the hundreds of minimum wage and unpaid wage complaints filed each year, and the Department of Employment Services has not been holding any formal hearings to adjudicate wage theft complaints nor assessing any penalties when violations are found.
Unless the minimum wage increase also includes a raise for tipped workers, the gap that tips will have to cover per hour under the law will grow every year: from $5.48 today to $8.73 in just three years. Since customers likely will not change their tipping behavior, that means more and more restaurant workers are going to end up making less than the minimum wage and having to decide whether to risk their jobs by asking their employers to follow the law or suffer in silence.
Seven states, including California and Minnesota, already provide the same minimum wage for restaurant workers as for everyone else. We believe the District should ultimately follow their lead. But the very least we should do in this minimum wage bill is make sure to cap the amount of customers’ tips that employers can take credit for so that the problem doesn’t grow any worse than it already is.