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On the Table

A new minimum wage bill could radically change the way restaurant workers are paid.

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Tuesday, July 09, 2013
Mark Roessler photo

A movement is underway that may revolutionize the pay structure for the servers who bring you your dinner when you eat out. It’s a controversial movement because it could make restaurant meals more expensive. It’s already put the beloved, and berated, custom of tipping under review.

That’s because it would do away with the rock-bottom $2.13 that’s now the federal minimum wage for tipped workers (including servers, bartenders, bussers), a wage that hasn’t been changed for 22 years.

Some say it would put restaurants out of business. Others tout it as a road out of poverty for servers, especially those in low-end eating places where tips are relatively low (the poverty rate among food service workers is three times that of other types of workers according to Restaurant Opportunities Centers United, a group whose mission is “to improve wages and working conditions for the nation’s 10 million restaurant workers”).

ROCUnited is enthusiastic about upping servers’ base wage, and is working to gather and publicize information about which restaurants in major urban areas pay their servers well—“well” meaning that decent pay doesn’t just depend on generous patrons (see ROC’s “Guide to Ethical Eating” at http://www.scribd.com/doc/115557026/2013-ROC-National-Diners-Guide-to-Ethical-Eating).

The story starts on Capitol Hill with the Fair Minimum Wage Act of 2013, filed by Sen. Tom Harkin (D-Iowa) and Rep. George Miller (D-Calif.). Besides raising the federal minimum wage from $7.25 to $10.10—an idea supported by 71 percent of American voters, including 54 percent of self-described conservatives, according to a Gallup poll in March—the Miller-Harkin bill would deal with the problem of the long-stagnant minimum wage for tipped employees such as servers. It would raise that wage from $2.13 ($2.63 in Massachusetts) to $3 an hour, then increase it by 95 cents a year until it equals 70 percent of the full minimum wage.

Not only would raising the minimum wage for tipped workers mean that those workers are better paid at the bottom line; it would eliminate certain abuses. Servers are paid in a complicated way that makes it easy for employers, deliberately or inadvertently, to cheat them. They are supposed to be paid in a way that ensures that they will receive at least the equivalent of the minimum wage, which in Massachusetts is $8 an hour, for every hour of work. And it is illegal for the employer to force a server to do work like closing after hours, when he or she will receive no tips, for the basic wage of $2.63 per hour. Furthermore, overtime pay must be figured based on the minimum wage, not the wage of $2.63 per hour.

Phasing out the tipped minimum and eventually paying servers the minimum wage would, among other things, clear up ambiguity about overtime and eliminate the possibility of forcing servers to work off the clock for the lower wage.

Some say, however, that the benefits to servers of raising the minimum wage are doubtful, partly because as the public becomes aware that servers are being paid more by the restaurants, people may not tip as much, and some may not tip at all.

And if hiking the pay of tipped workers hurts the industry by forcing restaurant owners to raise the cost of the food and losing business, jobs will be lost.

“I went through this in California,” Jim Sands, owner of Zoe’s, a popular seafood restaurant in Hadley, told the Advocate. “They raised the minimum wage for tipped employees. It closed a lot of the smaller restaurants that didn’t have the infrastructure and the support to finance something like that.”

Sands and other local owners of successful restaurants point out that raising the minimum wage for tipped workers would affect restaurants and their workers in different sectors of the industry differently. Joe Gionfriddo of Caminito’s Argentinean Steakhouse in Northampton, for example, says that servers in modest dining spots would benefit from having their base wage raised more than those in upscale restaurants.

“I have the kind of restaurant where my tipped employees make a good percent of their income on tips. They probably end up making more than my salaried employees,” Gionfriddo said. “You get a table of two that spends $100—that’s a $20 tip as opposed to a less expensive plate. There’s certainly a great differentiation.”

“We try to take care of our servers. We have health insurance, dental insurance. We have life insurance, vacations. They can make a pretty good living,” said Rudi Scherff, owner of the Student Prince, an anchor in downtown Springfield that has been in business for 77 years. Yet Scherff doesn’t find it easy to accept the idea of raising servers’ base pay to the minimum wage, even if the increase is phased in slowly.

“On a typical day, I probably have 12 servers working seven-hour shifts. That would add quite a bit to the costs,” he said. “If you started increasing the minimum wage, I’d have to go up on prices. As prices go up, business goes down. I think this would hurt the industry.”

Sands agreed. “If we had to pay our servers, say, $6 an hour, almost $3.50 more than they’re getting now, that means I would have to raise my menu prices almost 20 percent. That’s sticker shock to guests.”

However, Scherff added, that increase would affect independent restaurants differently than chains, which have larger, more diversified budgets and can compensate for expenses in one area with savings in another. “Most of the chains can control their costs a little bit better,” he said. “I can see in 20 years, you’ve got nothing but Denny’s.”•

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