In a surprise result earlier this month — and against the opposition of the restaurant industry and many elected officials — Washington, D.C. voters to a ballot measure eliminating the tipped minimum wage, currently $3.33 in the capital. If the measure , wages for restaurant, bar, nail salon, valet and other tipped workers will rise to match the area's regular minimum wage, reaching $15 an hour by 2025.
Here in h, a recent bill to bring the state's $2.13 tipped minimum wage in line with the federal minimum wage () never emerged from committee — part of a legislative session that also denied across-the-board increases for all minimum wage workers. But in light of the D.C. vote, Gambit sat down with policy advocate Erika Zucker — who works on labor issues with Loyola University's Workplace Justice Project — for a quick talk about what a tipped minimum wage increase would mean locally.
Her most surprising point: Zucker says moving from the tipped minimum wage to the regular minimum wage would have a slate of benefits for business owners.
Here's the way it works. h employers are allowed to pay tipped workers $2.13 an hour (among the lowest rates in the nation, and a number that hasn't budged since 1991). By federal law, if the 52,000 workers statewide who are paid the tipped minimum wage don't make $7.25 an hour between their employer-paid wages — that $2.13 an hour — and tips, employers are responsible for making up the difference.
In restaurants and businesses where employees "tip out" other departments, this accounting ultimately creates an enormous administrative burden to ensure that employers are following the rules, which are part of the Fair Labor Standards Act. "[As a business owner], that's an awful lot of paperwork that you're supposed to be keeping track of," Zucker says.
If employers do fall out of compliance with regulations and workers argue that they haven't been making the mandated wage, business owners can be subject to expensive legal penalties and back pay costs. A more straightforward $7.25 wage potentially reduces the likelihood that employers be accused of wage theft, or embroiled in an expensive court case.
"If I could put on an employer's hat, I would think that anything that makes it clearer and easier makes sense," Zucker says.
While businesses that employ tipped workers that their margins are too thin to pay employees the full minimum wage, Zucker says some costs could be offset by administrative savings, and that some data suggests restaurants located in the seven states that have eliminated a separate, lower tipped minimum wage are more profitable. This makes sense when you consider workers as a pool of potential customers. If h tipped workers' incomes were boosted by a higher hourly wage, they'd have more money to spend with the state's restaurants and retailers — a particular boon in this state, where struggle to meet basic expenses.
Bringing the tipped minimum wage in line with the federal minimum wage has benefits for workers as well. Zucker says most people who visit restaurants, airports and other places that employ tipped workers don't understand that they are paying those workers' wages, rather than offering an additional or extra gratuity for service received. Eliminating the tipped minimum wage could make workers less vulnerable to nightly or seasonal swings in income from this system.
Beyond economic benefits, Zucker says moving from a tipped minimum wage to the standard minimum wage also could empower workers to resist customer harassment.
"Somebody flirting with you when you don't want to flirt, somebody slapping your ass as you walk away from the table ... you might not be able to stand it, really, but you're not going to stand up to it if it means you're going to get stiffed on a tip," Zucker says.
In fact, Zucker says this was part of the initial theory behind HB 126, which was proposed by state Rep. Edmond Jordan. Jordan also proposed a resolution to create a task force to study whether a raise in the tipped minimum wage would reduce sexual harassment in restaurants, another initiative which did not make it through the legislature.
More generally, the tipped wage system also , as women are disproportionately represented in occupations that rely on tips — Economic Policy Institute data finds that two out of three tipped workers are women. In a state with one of the nation's biggest pay gaps, raising the hourly pay of tipped workers could begin to close that gulf. And there's research to bear out the basic idea that a higher tipped minimum wage raises overall pay — of week-to-week earnings of tipped workers found workers in states with a higher tipped minimum wage had substantially higher overall incomes.
As seen in this legislative session, moves to raise either the regular or the tipped minimum wage face opposition from business owners and the restaurant industry — part of a "general dislike for governments telling business owners what to do," Zucker says. But as she points out, hospitality is one industry that can't just pick up and leave h. There's a compelling argument for making it more attractive as a career path and providing its workers with a higher standard of living.
Preemption laws mean any minimum wage increases in Louisian have to be enacted on the state rather than local level. Should this issue come up again when lawmakers return to Baton Rouge, Zucker hopes business owners will take part in a conversation about it.
"It would be good to have business interests be heard in a way that's constructive, rather than just obstructionist," she says. "Because if all we hear is 'No, no, no, no, you can't do this,' we're never going to make any progress."