Less than a year after lawmakers struck a so-called “grand bargain” to increase minimum wages for all workers, advocates are mounting a new push to ensure tipped workers receive the same base wage as all other hourly employees.
In all but seven states, the minimum wage for service employees who can earn gratuities — many of whom work in the restaurant industry — is lower than the standard rate. Massachusetts has one of the largest gaps in the country, with a minimum wage of $12 per hour and a minimum tipped wage of $4.35 per hour.
The divide will persist as increases under the new law take effect and the standard minimum wage rises to $15 an hour by 2023 and the minimum tipped wage climbs to $6.75.
Legislation re-filed last week by Sen. Patricia Jehlen and Rep. Tricia Farley-Bouvier would effectively eliminate the separate rate for service workers and include everyone under the larger standard minimum wage.
“There isn’t any other small business that gets to pay their workers less than minimum wage,” Farley-Bouvier said. “It’s a perversion of what paying people is that we got to this point. The culture isn’t going to change by itself. It’s going to change with good policy, and this is good, solid policy.”
Their proposal comes amid a push across the country for what supporters call “One Fair Wage,” with similar legislation proposed in 15 other states and a bill in the federal House of Representatives. Jehlen and Farley-Bouvier discussed the topic on a Tuesday conference call with lawmakers in other states who have authored similar bills and with U.S. Rep. Joe Kennedy III, who co-sponsored federal legislation to raise the national minimum wage for all employees to $15 an hour.
Kennedy said the proposal, which is unlikely to garner enough support in the Senate but has new momentum in the Democrat-controlled House, would increase quality-of-life for workers in the restaurant industry.
“There are millions and millions of Americans where this economy just isn’t working for them,” Kennedy said on the call, which was hosted by the Restaurant Opportunities Center United.
In Massachusetts and many other states, employers are required to pay out the difference between the standard and tipped minimum wages if gratuities fall short. But advocates say wage theft is common and that relying on customer tipping patterns creates uncertainty and anxiety for employees.
Demographic imbalances play an important role in who is affected, too. Women make up 64 percent of tipped workers across the country and 67 percent in Massachusetts, according to data from the Restaurant Opportunities Center United, and restaurants tend to employ more people of color than other businesses do.
“Serving and preparing food is one of the jobs, like caring for old people, that is seen as women’s work and is underpaid,” Jehlen said. “It’s a source of pay inequity and a source of poverty among women.”
Research by the Restaurant Opportunities Center United found that instances of workplace sexual harassment decreased significantly in states where servers were paid a standard minimum wage, a trend that supporters say comes from women not needing to rely on interactions with potentially abusive customers for their livelihoods.
The One Fair Wage proposal does not advocate moving away from the tipping system, which is prevalent in the food-service industry. Instead, it suggests that workers make the same base pay and keep whatever gratuities they earn as a bonus rather than as a key component of income.
“It’s important to look at the seven states who have already done this and have these systems in place,” said Saru Jayaraman, one of the founders of the Restaurant Opportunity Center United. “These states require the restaurant industry to pay the full minimum wage with tips on top, and tipping averages are the same or higher in these states.”
Jayaraman pointed to Alaska, which has a minimum wage of $9.89 for all employees, as a state that regularly ranks near the top of highest-tipping states, and to San Francisco, which follows California’s $11 universal minimum wage, as one of the country’s highest-tipping cities.
Potentially complicating the latest effort, though, is the grand bargain struck last summer. The law phased in wage increases over five years, removed time-and-a-half pay on Sundays and codified an annual sales tax holiday, all significant overhauls to how businesses operate in the state.
The bargain also required businesses to make up any difference between tipped and minimum wages at the end of each shift rather than at the end of each week, something that restaurants are still working to do. Massachusetts Restaurant Association CEO Bob Luz — whose group also opposed increases to the minimum tipped wage — told the News Service last week the change created a “logistical nightmare.”
Luz asked state leaders to delay full implementation of the new system to allow for payroll systems to catch up at affected businesses.