Opponents of a tip credit are likely to encounter a formidable adversary as they push more areas to raise employers’ contributions to servers’ pay: the waiters and waitresses themselves.
A group that grew out of a successful effort to reinstate the tip credit in Maine is pushing back against a movement by organized labor and its political allies to raise the portion of a server’s minimum wage that the employer pays.
Restaurant Workers of America officially launched on Jan. 10, and it’s already working with servers in Minneapolis, Seattle, the District of Columbia, New York and elsewhere to maintain the current model for compensating waiters and waitresses. A tip credit allows restaurant employers to pay below the minimum wage, provided tips make up the difference.
The motivation for protecting the tip credit is economic, says Joshua Chaisson, a lifelong server who saw how the discontinuation of a tip credit can backfire and leave tipped employees with less money, not the higher incomes credit opponents suggest.
After Maine disallowed the credit, “we had guests come in and say, ‘Well, you get the full minimum wage now. Do I still need to tip you?’” Chaisson says. “They thought we were getting $15 an hour,” the ultimate wage target of the ballot proposal.
“We were actually only bumped up a buck and a quarter from what we were being paid beforehand,” he continues. “There was just a lot of misunderstanding. It would have cut my personal income off at the knees.”
The most dramatic effect, he says, was the effect on employment in areas like his hometown of Portland, Maine, a city that has become a foodie favorite. “I had friends who were waiters and bar backs and busboys. I saw a lot of them lose their jobs,” he says.
Servers offered to join with proprietors in lobbying state legislators for a tip reinstatement. “A lot of people learned that the interests of restaurant ownership and restaurant employees are not that dissimilar,” Chaisson comments.
After the legislature agreed to overturn the voter-instituted rule, “we started hearing from waiters and waitresses in Minneapolis and Michigan, and compared notes,” he says. Proposals had been aired in those areas to repeal a tip credit, very similarly to how it had been done in Maine.
Digging revealed it was no coincidence. The push for the Maine referendum had been led by a local group called Maine People’s Alliance, which seemed to have deep pockets.
“The more we learned, the more we followed the money trail, the more we poked, the quicker we found out that the local group was backed by a national organization called ROC,” Chaisson says.
Restaurant Opportunity Centers United, based in New York City, is a group that pushes for benefits and higher pay for restaurant workers. It professes to speak for the industry’s workforce.
An undetermined amount of its funding comes from Service Employees International Union, a union that has professed an interest in recruiting more restaurant employees as members.
Chaisson calls the group “the Scientology of the restaurant industry.”
Speaking with servers who were worried about the tip credit being scuttled in their areas, it was evident that the real proponent was ROC, says Chaisson.
Where is RWA getting the money to combat a well-funded group like ROC?
“What money?” says Chaisson. “We’re a membership-supported organization. We’ll get our money from members.” But to foster membership, tipped restaurant employees will have their dues waived for the first year. He estimates the current membership at hundreds.
Chaisson doesn’t directly answer the question of whether restaurant owners or associations are helping with funding. “We do permit restaurant proprietors to join, at a rate specifically for them. We refuse to think that employees and ownership need to be at odds.”
Wendyll Caisse, an owner of two restaurants in Maine, is listed on RWA’s website as a member of the organization’s board. The other five directors are tipped employees like Chaisson, who says he’s been waiting tables for 17 years.
A group consisting largely of servers, the very individuals whom dissolution of the tip credit would purportedly help, could be a powerful lobbying force. ROC has argued that keeping the credit is a boon to employers and a means of bolstering their profits at the expense of workers.
Down the road, RWA might turn its attention to other tip-related issues, such as service charges or tip sharing. But he notes that those topics generate a wide diversity of opinions, including among RWA’s own board.
“Right now, we’re laser focused on the tip credit,” he says.
The group is already planning to make a showing in New York, where Gov. Andrew Cuomo has called for dropping the tip credit and having restaurateurs pay the whole staff the full state minimum wage.
There’s also a pitched battle forming in Michigan, where “you’ll be a ballot initiative virtually identical” to the one that passed in Maine.
“We don’t see this issue going away on a national basis,” he says.
Members help make our journalism possible. Become a Restaurant Business member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.