April 24, 2014 | by Mark Lee
Don’t be fooled by D.C. tipped wage ballot initiative
waiter, tipping, gay news, Washington Blade, wage

In D.C., tipped employees are paid $2.77 an hour in base pay. In the highly unlikely event that total pay including tips is less than the local minimum wage during a pay period, the employer makes up any difference. As most familiar with – or who have friends working at – local hospitality businesses know, tipped worker earnings are typically double or triple or more the minimum wage.

Union organizers have continued spreading misinformation and hurling false charges, hoping to confuse D.C. voters about a likely November ballot initiative.

They failed in fooling the D.C. Council to scrap the tipped worker wage system during debate last fall that raised the local minimum wage in three stages – to $11.50 an hour beginning July 2016. They suspect they’ll have better luck befuddling residents by contorting facts.

They plan to qualify a ballot question pushing an additional one-dollar hike in the minimum wage, to $12.50 an hour, but also require restaurants and bars to pay tipped workers the full amount. Ironically, they would bestow those already well compensated and highest-earning a special supplement of nearly $10 an hour. All while threatening the financial viability of local bars and restaurants, forcing staff reductions and cutbacks in work hours, and eliminating jobs through technology.

The truth is, employees at almost all independent community bars and restaurants earn above the new minimum wage. Outside fast food, retail and other specific industries employing the vast majority of minimum wage workers, it’s of nominal impact. Except when it comes to trashing the traditional customer tipping system that is the long-established American standard.

Knowing how the system actually works is important to understanding the real facts.

In D.C., tipped employees are paid $2.77 an hour in base pay. In the highly unlikely event that total pay including tips is less than the local minimum wage during a pay period, the employer makes up any difference. As most familiar with – or who have friends working at – local hospitality businesses know, tipped worker earnings are typically double or triple or more the minimum wage.

But you wouldn’t know that from listening to the agitators pushing a radical change in the law. To hear them tell their tale, greedy restaurateurs and bar owners are engaged in what they casually refer to as “slavery.” And that’s one of their more innocuous retorts.

They also cavalierly toss about false statistics, unfounded and unsubstantiated random accusations that employers are cheating employees through elaborate “wage theft” schemes, and claim without evidence that employers don’t compensate tipped workers for any differential in base-pay-plus-tips and the minimum wage. In fact, you can count on less than one hand complaints filed during the past several years with the D.C. Department of Employment Services. But a big lie makes for a better sound bite.

What they won’t admit is that restaurants and bars, operating on the thinnest profit margins in commerce, would be required to pay hundreds of thousands of dollars in “duplicate pay.” Look around and do the math the next time you’re out dining or drinking or dancing.

Local restaurateur Geoff Tracy calculates increased costs for two restaurants at nearly half-a-million dollars – an unsustainable surcharge. Salaried managers joke of quitting to sign on as servers for the extraordinary extra bonus pay under this scheme.

Unions think they can mislead the public regarding the tipped worker wage system. There is, however, one big problem they won’t admit and a goal they hope to hide.

First, their main obstacle: Bar, restaurant and nightclub employees oppose them. Ask if they would prefer to be paid an hourly wage with tipping reduced or eliminated as a result. The latter is what the AFL-CIO Washington Metropolitan Council president revealed in D.C. Council testimony.

Second, their ultimate objective is to end tipping altogether with the cynical desire to compel unionization. Efforts to cajole hospitality professionals to join a union have been a miserable failure over many years, due to strong opposition from the preponderance of tipped employees. Unions think they have a better chance if pay is reduced by their trickery and misery replaces the majesty of customer satisfaction.

You may soon see special interest hires straddling city sidewalks soliciting your signature to qualify their initiative for the fall election. They need only 23,000 to do so.

Don’t be one of the fooled.

Mark Lee is a long-time entrepreneur and community business advocate. Follow on Twitter: @MarkLeeDC. Reach him at OurBusinessMatters@gmail.com.

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