If you’re wondering who’s emerging as restaurants’ main political opponent as the November elections approach, look no further than the nearest voter. Ballot initiatives have emerged as the preferred method for ramrodding through wage and other work-related initiatives that are too hot or complicated to push through a legislature.
Witness the proposals that are heading for the ballots of Washington, D.C., and Portland, Maine. Both will ask voters, “Wouldn’t you like to see servers and other tipped restaurant employees get the full minimum wage?” Who wouldn’t vote for something that fair and right?
But, of course, the matter isn’t that simple. Pushed fiercely by organized labor, the referenda seek to kill the tip credit, the wage concession that’s widely used by restaurant employers to significantly cut what they pay servers and bartenders. Essentially, the break allows the operators to count an employee’s tips as part of the minimum wage.
The convention has the added benefit of keeping the wages of servers closer to the pay of kitchen staffs. Without the tip credit, waitstaff would get the full minimum wage from their employers plus whatever tips are left by customers, increasing the gap between front and back of house. Who wants to work in a kitchen when you can make vastly more from waiting tables?
If residents of Portland vote to kill the tip credit of that standout restaurant city, the wages operators pay directly to servers, bartenders and other tipped workers would increase by about 50%, to $18 an hour by 2025.
Without a tip credit, restaurants in Washington, D.C., would have to directly pay servers $2 more per hour every year until 2027, when they’d be entitled to the same wages their non-tipped co-workers received, plus gratuities. If the city doesn’t raise its minimum wage in the next five years, that means servers get $16.10 per hour directly from their employer, or $10.75 more than they currently provide, an increase of 200%.
The chances of residents voting to preserve the tip credit of either city is about nil. In both situations, citizens already voted once to kill the employer break.
In the District of Columbia, 56% of voters cast their ballots in favor of disallowing it. But the City Council, caught unaware by public support for the move, enacted a law that essentially negated the referendum, and the tip credit was reinstated.
Similarly, a statewide vote killed Maine’s tip credit in 2016. A lobbying effort led by servers themselves convinced lawmakers to reinstate it in short order. The employees said they wanted the credit back because people stopped leaving tips, thinking that their waiter or waitress was already getting paid by their bosses. The workers ended up making less money, not more.
A minority of servers and bartenders are joining with restaurant operators in both cities to thwart the new attempts to kill the tip credit. In Maine, additional pressure is coming from ride-hailing and third-party delivery services, since the initiative heading toward the ballot would define the drivers as employees of those enterprises and mandate they receive the full minimum wage.
In Washington, opponents have amassed a war chest to combat the upcoming proposal, with the 2018 defeat fresh in their minds. They point out that servers in the state already earn an average of $23.19 an hour in wages in tips, and that bartenders pocket $20.57, as indicated by the U.S. Bureau of Labor Statistics.
The expectation is that the fight to sway public opinion on the tip credit will be a tough one.
And as experience has driven home, even if proponents of killing the credit are defeated this time, they only have to wait two years before trying again.