03/13/2018

Labor Unions' Self-Interested Scheme To Abolish Tipping

Jennifer Schellenberg, Washington Examiner

Is the Labor Department scheming to take away restaurant servers' tips? That's the message some labor advocates are sending in response to a proposed rule-making by the Trump administration that would permit kitchen staff in certain states to receive a portion of servers' tips.

More than 300,000 comments were submitted on the rule; many were copy-and-paste statements generated by labor groups. But mixed among these comments were reflections of genuine anger from servers who were concerned about losing their tips. As a 17-year veteran of the service industry, I hear their concerns. I share them. But I also know that they're based on a deep misunderstanding of what a tip pool is and why it can be necessary.

To understand this issue, you first need to understand how servers and bartenders get paid. In most states, we're paid a base wage below the minimum wage, based on the recognition that we're earning significantly more than the minimum wage when tips are included. (If we don't, the restaurant owner is legally required to top us off so that we never make less than the minimum.) The difference between the full minimum wage and our base wage is called the "tip credit," and it allows restaurants with narrow profit margins to properly staff and keep menu prices low for guests.

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