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3 political developments the restaurant industry should be watching

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Not all of today’s political fireworks are coming from Congress and the White House. Here’s a quick roundup of developments elsewhere that hold important implications for members of the restaurant industry, employer and employee alike.

Last-chance fighting over Washington, D.C.’s tip credit

Restaurants in the nation’s capital are trying to bounce back from a political whoops that will kill the tip credit and raise servers’ minimum wage to $15 an hour if they don’t win in overtime. The wage break is already set to be phased out, the result of a ballot initiative that voters approved in June after intense lobbying by One Fair Wage, a coalition of churches, unions and labor advocates. Locals say the proponents out-shouted restaurateurs and servers who feared they’d lose tips altogether if the measure passed. More critical observers say operators didn’t realize the risk until the votes were counted.

But opponents have been given a second chance, a proposal endorsed by a majority of the D.C.’s lawmakers to preserve the credit through legislation. On Sept. 17, the Council of the District of Columbia held hearings on the measure. Local media estimated that some 250 stakeholders offered their input on keeping or dropping the tip credit, and noted that the majority of participants spoke in favor of preserving the employer break.

Both sides say the situation in D.C. is a microcosm of the tip-credit struggle raging in jurisdictions from coast to coast.

Sexual harassment allegations fly

McDonald’s workers who support Fight for $15 were expected to walk out at lunch today in 10 U.S. cities as a protest against what the coalition asserts is widespread sexual harassment within the chain’s labor ranks. Although Fight for $15 has coordinated walkouts and protests against McDonald’s in the past, the group says this is the first time that the action is tied to the #MeToo movement.

But that’s far from the major twist to the situation. The scheduled action comes as the Service Employees International Union (SEIU), a major backer of Fight for $15, is contending with allegations of sexual harassment within its own house. A vice president of the national association and president of a major chapter has been sued for allegedly harassing an organizer, according to PayDayReport.com, an investigative-reporting website focused on labor issues. 

That action follows reports by BuzzFeed.com last fall that the Chicago head of Fight for $15, Caleb Jennings, was fired amid allegations that he had abused female union employees. He was one of four prominent SEIU executives who were fired or sanctioned because of harassment accusations. 

Pro-employer forces such as Center for Union Facts are trumpeting what they characterize as hypocrisy from the movement. 

McDonald's also refutes Fight for $15's allegations. “We have strong policies, procedures and training in place specifically designed to prevent sexual harassment," it said in a statement. " To ensure we are doing all that can be done, we have engaged experts in the areas of prevention and response to evolve our policies so everyone who works at McDonald’s does so in a secure environment every day.”

Servers in St. Paul push to keep a lower wage

Restaurant employees are also demonstrating in St. Paul, Minn.—in favor of keeping a lower wage for servers. They fear the tip credit will be killed as part of a larger effort to raise the minimum wage to $15 an hour, or what Fight for $15 calls a living wage. If small employers are forced to pay that much, server jobs could be eliminated—assuming mom and pop or small multiconcept groups can even stay in business, contends Restaurant Workers of America (RWA). Instituting a wage of that scale might also discourage patrons from leaving a gratuity, a practice that typically raises a server’s compensation far above $15 an hour. 

RWA grew out of a successful movement by servers in Maine to reinstitute the state’s tip credit after residents voted in a 2016 ballot initiative to kill the employer break. An official told Restaurant Businessthat many customers mistakenly assumed waiters and waitresses were switched to a salary and therefore no longer needed to be tipped. He saw his compensation fall precipitously.

The RWA organized demonstrations outside city hall this week to push against a discontinuation of the tip credit. They were not alone in voicing an opinion on the matter. Other servers reportedly showed up as well, urging legislators to drop the archaic practice (it originated right after the Civil War) and put everyone on the same pay rate.

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