HARTFORD — Over the objections of the restaurant industry and Republican lawmakers, a bill passed out of committee this week that would require paying the full minimum wage – $15 an hour on June 1 – for tipped workers including wait staff and bartenders.
Proponents of the bill say it would put tipped workers on par with everyone else and free them from their current dependence on the generosity of customer tips, while restaurant owners say the bill would leave servers earning even less money when restaurants are forced to raise menu prices and customers tip less.
The Labor and Public Employees committee approved the bill by an 8-4 party-line vote as Republican lawmakers aligned with the restaurant industry to oppose the bill, arguing that the measure would limit the choices of tipped workers and their employers. The legislation still needs approval from the House and Senate to become law.
“If that was a business model that worked effectively, we would see it happening naturally in the marketplace, and there’s no reason why establishments can’t engage in that type of activity currently,” State Sen. Rob Sampson, R-Wolcott, said before voting no. “All this bill does is ban certain opportunities from existing — it doesn’t just ban opportunities for employers to exploit employees, it also bans opportunities for employees to have the opportunity to create wealth and improve their station in life.”
Each of the four Republican lawmakers on the labor committee stated their opposition to the bill before the eight Democratic lawmakers approved the measure without further comment.
Saru Jayaraman, president of One Fair Wage, a group working to eliminate the lower minimum wage for tipped workers across the U.S., told lawmakers during a hearing this month that the market is already pushing restaurants to pay servers a higher wage before tips.
The group has identified almost 150 restaurants in Connecticut paying at least the minimum wage plus tips to entice workers who have been leaving the industry since the start of the COVID-19 pandemic, she said.
She said that while many people were staying home or earning hazard pay, restaurant workers were working for less than minimum wage, while having to enforce mask mandates and facing increasingly belligerent customers. Many left the industry, leaving restaurants short-staffed. And the only thing that will bring many of them back is the guarantee of a higher wage, she said.
“If the customer doesn’t pay the bill, that is a crime, and the employer may sue, may call the police, may go after them,” Jayaraman said. “If the customer doesn’t tip, the worker isn’t allowed to say anything. If they say anything, they can get fired, but those tips are supposed to bring them to the full minimum wage.”
Jayaraman said that while employers are required by law to pay their tipped workers the difference if their tips don’t bring that up to the minimum wage, that is difficult to enforce and often isn’t enforced. When the Department of Labor was enforcing the law strictly between 2010 and 2012, she said, the department found only a 16 percent rate of compliance with the law on complaints it investigated.
Keith Beaulieu, owner of The Main Pub in Manchester, told lawmakers that paying tipped workers the minimum wage would raise his annual payroll by $135,000. He said that is an “unimaginable” cost for his business, and would force him to apply service charge to checks – which he believes would leave customers less inclined to tip servers who he said earn about $29 an hour on average with tips.
Jayaraman said federal law only allows servers to share tips with back of house workers if the servers are paid the full minimum wage plus tips, because with a below-minimum wage the servers need them to bring themselves up to the minimum wage.
“That’s why this bill would be so great, because it would allow so many more restaurants to do what they want to do, which is to be able to share tips with back of house,” she said.
Adam Halberg, CEO of Barcelona Wine Bar — a national chain of upscale tapas bars with five locations in Connecticut — said that people deserve quality jobs with a reasonable income, but said the bill paints all restaurants with a broad brush.
Halberg said the average tipped employee at Barcelona earns about $35 an hour, or $73,00 a year with tips. In certain cities, bartenders can earn closer to $56 an hour, or $116,000, he said. But that’s not the same at other restaurants, he said.
“We heard a lot of talk here about lower check average places like Denny’s and IHOP, and in places like that, folks are not making the same opportunities, they’re not having the same experience they’re having at my restaurants,” Halberg said. “And legislation that tries to treat both of those exactly the same is broken before it gets out the door.”
Flexibility and a low bar to entry are major reasons why so many people work in restaurants, Halberg said, but workers can advance quickly to make a lot of money. Legislating away tips, which he said the bill would effectively do, will hurt those people.
“More than half the people in this country work in restaurants at some point, and it’s with good reason,” Halberg said. “You don’t need a college degree, you don’t need a GED, you don’t need to speak the language, you don’t need any experience before you come in.”
Jayaraman said that the reality is the amount of someone’s tip isn’t usually based on the level of service they provide, but on how attractive the customer finds the server, or how the customer’s implicit biases shape their opinion of the server — as Black servers are paid less tips, she said. The need to please the customer to make a living also leaves servers facing sexual harassment from customers, she said.
“What we are doing with the sub-minimum wage is subjecting workers — especially workers of color and women — to the biases and the harassment and the vagaries and the tastes of customers who can decide not to tip at all because something didn’t please them,” Jayaraman said.
Halberg said it’s unfortunate that there is inequity that comes with servers being paid to look like they’re having a good time, and to convince customers they’re having a good time. But eliminating way for people to earn higher pay isn’t the way to legislate against sexual harassment, he said.
“There are great restaurants that offer great opportunities for people to make real income,” Halberg said. “It’s not all, and there may be legislation required to get everyone up to the same standard. However painting the industry with this broader brush will remove the ability of the restaurants that are doing it right to compensate people the way we are right now.”