Rhode Island business owners are divided over whether or not the $2.89 tipped minimum wage should be raised.
The issue is before the General Assembly in the forms of companion Senate and House bills sponsored by numerous legislators, with Sen. Gayle Goldin, D-Providence, and Rep. Aaron Regunberg, D-Providence, leading the move for an increase. The last hike was 20 years ago, they said.
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“There are 20,000 tipped workers in the state,” said Goldin. “They deserve a raise. … We’ve left them out of the minimum wage conversation for too long.”
The bills would raise the tipped minimum wage earned by many servers, bartenders and busboys to $4.50 an hour in 2016, followed by $6, then $7.50, then $9 an hour in subsequent years, and to whatever the regular minimum wage is in Rhode Island by 2020.
Bob Bacon, owner of Gregg’s Restaurants in Warwick and three other towns, and chairman of the board of the Rhode Island Hospitality Association, says he as a business owner and the association as a group representing some 600 members and allied vendors oppose that legislation.
“We think it’s going in the wrong direction,” said Bacon, citing some of his servers who make $35 an hour and even college-aged wait staff that make $18 an hour. “Our tipped employees are our most highly compensated employees.”
The hospitality association and another trade group, the National Restaurant Association, note that every employer is required by law to bring the employee receiving the base tipped minimum up to the $9 minimum wage, making up the difference if tipped income falls short. The parity is required under the Fair Labor Standards Act.
Some lawmakers, workers, a group called Restaurant Opportunities Center United Rhode Island, and even some businesses don’t agree.
Moira Walsh of Providence, a waitress at Classic Café in the city, said the tipped minimum wage is based on the idea that everyone leaves substantial tips, which is not necessarily the case.
“I work across the street from three high schools and a homeless shelter and none of those [customers are] known for tipping well,” Walsh said. “I frequently have people leaving less than their bill and you end up paying to cover it.”
In addition, she said telling an employer that the tips aren’t equating to a living wage can backfire.
“That requires you to go to the employer and say, “I’m not doing a good-enough job to get the bare minimum and I need you to compensate me.’ And I have had [previous] employers say to me: ‘If you can’t find a way to do it, I will find somebody who can.’ ”
Asher Shoenfeld, co-owner of the Providence retail shop, Frog & Toad, insists a raise of the tipped minimum wage is overdue. He also believes paying these workers better will boost consumer spending and the economy, including small mom-and-pop stores like his.
Relying on the discretion of employers to make up the difference in wages and tips is not necessarily fair because not all employers treat their workers fairly, he added.
“We have an industry that’s so broad, you’ve got the folks that work at the finest five-star restaurants being looked at in the same category as a waitress at Denny’s with a family of three, and she’s lucky to make the minimum wage, or make enough in tips to have a living wage,” Shoenfeld said. “That’s who we need to protect here.”
According to Regunberg and Goldin, compromises to the increases in the tipped minimum are possible.
“The long-term vision of raising the tipped minimum wage and eliminating it is a bit of a culture shift and may take a few years for us to get to,” acknowledged Goldin. “I’ve heard from businesses all over the map on this. There are plenty of employers already paying above the tipped minimum wage and running successful businesses.”
That said, Goldin and Regunberg think some type of change is critical.
Deb Norman, who owns two restaurants, Rue De L’Espoir and Rue Bis in Providence, thinks compromise is possible and that she and her peers could adjust.
“I agree the tipped minimum wage should be raised … by a dollar a year for at least three years and that would put [the wage] in correct proportion to the [standard] minimum wage, which is usually about two-thirds,” she said.
Bacon disagrees. He said a dollar an hour raise to the tipped minimum wage would be a substantial hit to business owners at a time when the economy is still foundering and menu prices can’t be raised to compensate without losing customers.
One worker, Ian Lindelsee of Providence, sees both sides. He has just left a job at P.F. Chang’s in the Providence Place mall where he was making $15 an hour, including tips, working on Saturdays and Sundays – the busier days, he said.
“For me, [the current tipped minimum] is an inequality in having customers feel they have to pay the waiters for [a] living wage that the business should be paying,” he said.
At the same time, any adjustments to the tipped minimum should be made so that employers do not suffer either, he said.
“I would like to see it go up incrementally,” he said. •
