Haymarket owner, who raised pay, ended tipping in 2015, praises minimum wage legislation

While the Legislature was debating raising the state’s minimum wage to $15 an hour in a ‘grand bargain’ bill passed by the House and Senate on Wednesday, Haymarket Cafe owner Peter Simpson was increasing his lowest paid workers wages to $15.50.

Simpson announced a few years ago that he would increase the minimum wages of his workers to a living wage. He said he applauded the Legislature’s decision to do the same.

“Whatever compromise is made that increases the minimum wage I am for,” Simpson said, adding that the compromise of getting to $15 per hour in five years rather than four was a fair compromise.

The Legislature has worked for months negotiating a bill to enact a $15 minimum wage, paid family and medical leave, and placate the state’s retailers, who wanted a reduction in the state sales tax. The legislation, unveiled and passed by both houses on Wednesday, aimed to keep three separate citizens’ petitions off this year’s November ballot — one each for a $15 minimum wage, paid family and medical leave, and a reduction in the sales tax.

The bill would raise the minimum wage to $15 over five years, establish paid family and medical leave to begin in 2021, and establish a permanent tax holiday weekend in August.

Where Simpson thought the legislation came up short was in its benefit to tipped workers, who now receive an hourly wage of $3.75 per hour, which would be raised over five years to $6.75 per hour.

He said having a separate wage for tipped workers is a problem.

“Restaurant owners should be paying their employees salaries, not their customers,” he said.

Simpson decided in 2015 to increase the minimum wage at Haymarket to $14 and thereafter increase it in increments. Earlier this month, he increased his lowest wage to $15.50 per hour. At the same time, he eliminated tipping so that all his workers, those who received tips and those who did not, would receive the same minimum wage.

“For us the repercussions have only been positive,” Simpson said. “I can’t tell you the amount of times that people have come up to me and said ‘I’m coming to your cafe now. I’ve decided to support a business which pays a living wage.'”

The short term result was that a few workers left, but others sought out the cafe, and the turnover since that time has been nearly non-existent, he said.

“We hired one person last year,” he said. “This is somewhat unheard of in the industry. There’s a level of stability at the cafe that I’ve never experienced before, and I’ve been open for 28 years.”

When Simpson eliminated tips, he increased prices by 20 percent, which he said is about the rate his customers would leave as a tip. He said his customers more or less paid the same while his workers received a more reliable salary, independent of how busy a shift they worked.

He added that many restaurant workers do not declare the full value of their tips, so the government also would benefit by eliminating tips — it would receive tax revenue on all of the money spent and on all the salaries paid, he said.

Dave Eisenstadter can be reached at deisen@valleyadvocate.com.

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