Sacramento, CA (Law Firm Newswire) June 5, 2015 – Tips in Los Angeles may be rolled into a server’s wage, should laws boost minimum wage. This is a hotly debated issue affecting restaurant workers and others who garner tips from clients or customers.
Lawmakers are once again debating raising the minimum wage in Los Angeles. Should the wage be boosted to $13.25 or perhaps $15.25? How would that affect restaurant workers? Aside from the figures and logistics of the issue, the restaurant industry is less than impressed with the idea.
Los Angeles hired Beacon Economics to analyze a proposed wage boost. What they found was that nearly one fifth of LA County employees were earning, on average, less than $13.25 an hour, in positions that usually received tips.
“The restaurant industry’s point-of-view is that the city ought to count tips toward the added amount that employers would have to pay workers,” said well-known Sacramento employment attorney, Deborah Barron. Though adding in tips would reduce the financial burden on employers, many workers and other financial pundits see it as an unfair and inequitable move, as not every server gets tips or gets good tips.
Additionally, it would mean more bookkeeping for restaurant owners, as they struggled to figure out tip totals for each server and figure out the differential. “You have to assume in that process, should it happen, that not all employers would go that far to ensure their workers were paid fairly, and not all workers would accurately report their tips,” added Barron.
As things stand, many restaurant owners are indicating that if the city raises the $9.00 or $10.00/hr minimum wage significantly and expects the industry to pick up the price differential, Los Angeles may lose a large number of restaurants. Their argument is that servers are capable of earning as much as $30/hr more in tips alone – above their minimum wage, and that calculating that extra money as salary would not hurt either the worker or the employer. While some wait staff likely do make good money, they are considered to be front-of-the-house staff. Back-of-the-house staff is neither tipped nor allowed to share tips made by front house workers.
“It’s called shifting the financial burden from the employer to the worker,” Barron remarked, “and that definitely would harm workers.” Additionally, including tips in wages makes it more difficult to catch employers who pay less than minimum wage, deny workers legally mandated breaks and who withhold money by illegally deducting uniform costs from wages.
And shifting the financial burden onto low-income workers, by including their tips in a minimum wage increase, would violate California law, according to labor activists. In fact, California law specifically prohibits employers from counting tips against wages. Many workers in occupations that receive tips, such as barbers, hairdressers, bartenders, wait staff and taxi cab drivers typically make less than $25,000/year, according to the Raise the Wage Campaign. If workers already make less than the suggested $13.25/hour minimum, and the minimum wage does get increased to $13.25/hour within a few years, who would that benefit? Not the workers.
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