California restaurant employees who earn tips, such as servers, bartenders, hosts, and server assistants, are in some ways more fortunate than those who do the same job in most other states around the nation.
In most states, there is a minimum wage for hourly employees and a much lower minimum wage for workers who make most of their income from tips. For example, in South Carolina, an employee working a retail job is entitled to federal minimum wage of $7.25 per hour. An employee at a local chain restaurant waiting tables is entitled to only $2.13 per hour from their employer, as long as they earn more than that in tips. If no customers came in one day, and a server earned less than $2.13 per hour, employer would be required to pay the difference between $2.13 and $7.25 per hour after employees tips are applied towards the deficiency.
As our Los Angeles employment lawyers can explain, California only has a single minimum wage for all hourly employees. Currently state minimum wage is $9.00 per hour and it will go up to $10.00 next year. An employer is required to pay a server this amount regardless of how much he or she makes in tips, pursuant to California employment law.
However, as legislators are proposing a minimum wage increase to either $13.25 or $15.25, restaurant owners are concerned it will be unfair and harmful to business if they have to pay servers and bartenders standard minimum wage regardless of how much these employees are earning in tips. In other words, restaurant owners wish to remove the ban on employers using a tip credit to offset a requirement to pay minimum wage.
According to a recent news article in the LA Times, restaurant owners say it is unfair for people making well over the minimum wage to get full minimum wage on top of their tips, and doing so, the owner of three cafes, would cause her to go out of business. To support their claims, restaurant owners and their representatives give examples of people making very large amounts of tips and explain how they do not need minimum wage as well.
On the other hand, supports of labor rights for restaurant employees accused restaurant owners of “cherry picking” data by using examples from a select group of Los Angeles’ fanciest restaurants frequented by the rich and famous, while the majority of restaurant workers within the state earn less than $25,000 per year, and many have second jobs just to be able to make ends meet.
It should also be noted, when comparing how California treats restaurant workers compared to other states with a lower minimum wage and tip offset credits, California, and especially Los Angeles, has one of the highest costs of living in the United States. The fact something will work and allow someone to make a living in other states does not mean it is appropriate in Southern California.
Another important point is servers may be the employees receiving the tip, but they often have to “tip out” other employees such as bar tenders, bussers, hosts, and server assistants at the end of the night, reducing the amount of money they “walk” with.
Contact the employment attorneys at Nassiri Law Group, practicing in Orange County, Riverside and Los Angeles. Call 714-937-2020.
L.A. restaurants push for tips to count toward minimum wage, April 19, 2015, LA Times
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