President Biden’s first order of business is to fast-track a COVID-19 relief bill through Congress, and we agree that long-term economic stimulus is needed. We remain focused on including the Senate version of the RESTAURANTS Act in any relief plan.
However......the proposed plan also includes a national $15/hour minimum wage, and most concerning for our industry is a proposal to eliminate the tip credit.
In Massachusetts, we have been operating with a state minimum wage that far exceeds the federal minimum wage. Yet, in spite of these higher minimum wages, Massachusetts has recognized the importance of having and protecting the tip credit.
Eliminating the tip credit would have a dramatic impact on a large percentage of the industry and most importantly our employees.
- Tipped employees are already earning the full minimum wage. Both federal and state law require employers to make up the difference to ensure the employee is paid minimum wage for all hours worked.
- Tipped employees are the highest compensated workers in any restaurant setting, earning well above minimum wage, according to the Federal Bureau of Labor Statistics.
- This compensation model has allowed the highest percentage of employees to earn the highest average wage. If given the opportunity, tipped employees would not trade places with any hourly compensated employees in their restaurants.
- According to federal data, the average Massachusetts tipped employee earns more than a dollar per hour more than California servers who are paid the state minimum wage. The current compensation model works for tipped employees because they can maximize their income in the relative short hours that come with being a restaurant server
Now is not the time to rush through a bill that further sets back an industry that has endured more job loss and lost revenue than any other industry in the country… or that punishes tipped workers who look to the restaurant industry to make a better life for themselves.
Congress is drafting their stimulus plan now. We need you to weigh in today to ensure this proposal is not included in any stimulus bill. Congress needs to recognize the importance of the tip credit to your operation.