Democratic presidential candidate Kamala Harris has embraced elimination of the federal tip credit as a key component of her economic platform, giving a rare victory to the labor group aiming to ban the concession for restaurant employers.
That group, union-backed One Fair Wage, has been dealt several defeats in its efforts this summer to put a credit-killing provision on state ballots this election cycle. The only place where it succeeded was Massachusetts.
Yet the group and its well-spoken leader, Saru Jayaraman, continue to win headlines and coverage from the major media for their efforts to end the credit, this week’s edition of the Working Lunch political-affairs podcast notes.
Co-hosts Joe Kefauver and Franklin Coley, partners in the Orlando government-affairs consultancy Allign Public Strategies, did not express surprise that Harris included elimination of the tip credit in the five-point economic plan she vowed last week to pursue if elected. Weeks earlier, she’d followed the lead of her Republican opponent, Donald Trump, in pledging to eliminate federal income taxes on tips. Clearly she was courting groups like Service Employers International Union, the benefactor of One Fair Wage.
What was startling, said Coley, was the high priority Harris gave to ending the federal tip credit. In all, she detailed five points to her economic plan. Eliminating the measure was a component of Point Number One. That positioning suggests Harris has more than a passing commitment to seeking an end to counting gratuities as part of a worker’s pay, Coley observed.
Kefauver noted with admitted puzzlement that One Fair Wage continues to land big headlines on the issue, which it portrays as a way of paying servers and other tipped restaurant employees a lower wage. In actuality, employers who use the credit still have to pay the minimum wage a tipped worker is due if gratuities don’t bring the employees up to that level.
Still, if tips do bring servers and bartenders up to the federal minimum of $7.25 an hour, the workers need be directly paid $2.13, a major payroll savings.
One Fair Wage had hoped to get a voter initiative on the ballots of Ohio and Arizona in November, investing a reported $8 million in the efforts, but failed in each instance.
The labor group praised the Democratic ticket for pledging to require that all employees be directly paid the full minimum wage for their jurisdictions. It also suggested that the commitment could prove decisive in deciding who’ll be assuming the Oval Office next January.
“The issue is especially critical in key swing states, where the sheer size and influence of these workers could sway the election,” One Fair Wage said in a statement.
This week’s installment of Working Lunch also analyzes last week’s debate between Harris and Trump through the lens of what the back-and-forth could signal for the restaurant business. It also surveys ripples on the legislative front that could build into developments of significance.
Press Play for the full podcast.
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