Amid the ongoing debate to raise Los Angeles’ minimum wage, restaurant owners are arguing that tips should be included in the added amount they would need to pay employees to hit the proposed minimum of $13.25 or $15.25.
“There is just no room for us to be able to afford this increase and stay in business,” said Caroline Styne, who owns several restaurants and cafes around Los Angeles, according to the Los Angeles Times. “None of us is refuting the fact that people making $9 an hour cannot get by on that. I’m talking about the people that are already making well over that.”
Restauranteurs say counting tips toward wages will ensure the wage hike benefits those who need it most and reduce the financial impact on businesses.
“We’re willing to pay people to get them to minimum wage,” restaurant owner David Dickerson told lawmakers, according to the Times. “We’re just asking that tips be part of the equation.”
Restaurant servers may earn a base hourly wage of $9 or $10. However, restaurant owners have cited industry research and argued at public hearings that the amount can reach $30 or more per hour when tips are factored into the equation. They have also said using tips to reach the proposed wage would not affect workers: if tips are low on certain days, employers would compensate for the difference to ensure the hourly minimum is met.
But Rusty Hicks, head of Los Angeles County Federation of Labor, said restaurant owners “cherry-pick examples of servers in very high-end restaurants” who receive substantial tips. The Raise the Wage Campaign estimates 62 percent of tipped workers in Los Angeles—both those who work full and part time —earn less than $25,000 per year, such as barbers and bartenders.
Under California law, employers are not allowed to count tips toward workers’ wages, and it is an argument labor activists have brought to the table. They say most tipped workers have low incomes, whether in or out of the restaurant industry. Activists also say including tips leaves other employees vulnerable to being underpaid, such as those who wash cars and wait tables.
“It’s not fair for us to be kept down while everything around us increases in price,” Troy Taylor, a South Los Angeles resident who works part time as a server and cashier at concession stands, told city lawmakers at a recent hearing.
Taylor said that from both her jobs, where her wages are at about $12 per hour, she earned $900 in March, including tips.
Restaurant owner George Abou-Daoud told the Times that tips are already essentially like wages since employers are required to pay taxes on them and are accounted for when calculating Social Security and Medicare taxes. He added that the proposal to count tips is meant to apply only to the restaurant industry.
But labor activists say implementing such a measure could result in “wage theft” by making it more difficult to catch employers who may shortchange employees.
Rosemarie Molina, a lead organizer with the Raise the Wage Campaign, argued that when tips are sparse, businesses could neglect properly compensating workers to meet the proposed hourly wage amount.
“We have millions and millions of dollars in claims showing employers should not be given the benefit of the doubt,” Molina said, according to the Times.
Los Angeles is considering a citywide hourly wage hike to at least $13.25 within a few years.
(www.asianjournal.news)
(LA Weekend April 25-28, 2015 Sec. D pg.1)
