Congress: We Like Our Tips! - Leave the Tip Credit in Place!
FOR IMMEDIATE RELEASE / PRURGENT
In the foodservice industry, we’re usually in a hurry. Despite the calm in the dining room, there’s an excited energy in the kitchen. It doesn’t leave much time for chit chat but my coworkers and I try to find moments to catch up when we can. Lately, one topic of conversation has been front and center—Congress’ proposed elimination of the tip credit and how that will impact our income.
The COVID-19 pandemic has been tough on everyone, but the restaurant industry has been especially harmed. One-in-six U.S. restaurants have shuttered and more than two million workers have lost their jobs. Some have been laid off, rehired, and laid off again. In addition to the financial strain, the uncertainty is emotionally and mentally crippling.
At Copper Door Restaurant, we’re like a family. Management is doing all they can to keep the employees afloat; everything from adjusting hours, to utilizing PPP loans, to making sacrifices themselves in order to ensure we have enough to get by.
Those of us lucky enough to still be working have a new battle to fight. As part of the Raise the Wage Act, Congress wants to eliminate the tip credit and enact a $15 minimum wage. As tipped employees, we are fully aware that right now there is a lower minimum wage in most states and a tip credit for tipped workers like waitstaff and bartenders. We also understand that our earnings are protected under the tip credit. If a tipped employee’s hourly rate plus tips doesn’t meet the standard minimum wage their employer is legally obligated to make up the difference, so we’re never getting paid less than minimum wage.
This safety net is rarely used because the U.S. has a pro-tipping culture. With our hourly wage plus tips most servers make between $19 and $25 an hour, far above the proposed $15 minimum wage. Elimination of the tip credit puts the tipping aspect of our culture at significant risk, which would inevitably lead to a drastic decrease in tipped employees’ earning potential.
Not only would elimination of the tip credit hurt the employees it’s meant to help, it would further devastate the restaurant industry. Most dine-in food service establishments operate on a thin 3% to 5% pre-tax profit margin. A $15 minimum wage for tipped employees would mean a triple-digit increase in tipped labor costs. Such an increase in labor costs will force price increases of as much as 20% to consumers, and still require benefit and staffing cuts throughout restaurants as a whole.
For the remaining workers, our motivation would plummet along with our tips. It's like telling a salesperson they can no longer work for commission; where is the incentive to go above and beyond if you won’t be rewarded accordingly? Our hourly wage secures our place as an employee of the restaurant, but it is the tips that help us thrive. Without them, many of us would reluctantly have to find a different career.
Being a server or bartender is a uniquely rewarding job experience, and few realize how many of us choose this as our lifelong career path. It is a balancing act that requires attention to detail, the ability to multitask, and tenacity. A knack for reading people and a caring disposition are the most important arrows in our quiver. Each of us have loyal “regulars” that ask to be seated in our section because we have bonded with them, we know what they like, and we overcorrect any mistakes. In response, they want to take care of us.
We treat our sections like our own small businesses. To us, the restaurant floor is an interwoven system of independent entrepreneurs that runs like a well-oiled machine. We have no issue with an increased minimum wage for non-tipped workers, but for our industry the tipping model works for the guests, the employees, and the company. It’s a perfectly balanced three-legged stool which is how our company contemplates whether a decision is right the one in how it creates balance or not. If you give too much attention to any one leg of the stool, and not enough to another, the stool will topple over.
We are so passionate about keeping the tip credit in place that we’ve started a petition at www.welikeourtips.com. It’s a grassroots effort we put together with hopes of all tipped employees having their voices heard. We are the ones who will be impacted, so we are the ones lawmakers should listen to.
Together, the six of us have more than 50 years of experience in the restaurant industry. We’ve been through lean times and prosperous times. Any tipped employee choosing to work for a great company can attest to the value of the tipped employee to this industry, and the value tips have to our lives. We have fed our families, bought cars, purchased homes, paid medical bills, paid for our own schooling, the schooling of our children, and so much more, with our tips. Any thought that you need to protect us, only devalues all that we have worked so hard for. It is by our own doing that we have succeeded and live our American Dream.
We know this is one of the hardest periods the restaurant industry has ever experienced. It’s not the time to add an unnecessary burden. On top of killing businesses this would actually hurt the very people it’s designed to help. Congress should get out of the way, let our restaurants recover, and let us focus on serving our guests to earn our own living.
Patrick Foy, Kellie Connolly, Leeya Rollins, Marsha Mastromariano, Tyler Green, Mike Sheehan work at Copper Door Restaurant in Bedford, New Hampshire. www.copperdoor.com