Philadelphia Inquirer

Wage Increase Sought For Workers Who Also Earn Tips

The Philadelphia Inquirer — Tuesday, March 25, 2014

Andrew Seidman, Inquirer Trenton Bureau

TRENTON — An Assembly panel advanced legislation Monday that would increase the minimum wage for New Jersey workers who make most of their money in tips, despite objections from restaurant and beverage industry officials who feared a blow to businesses.

The bill would allow employers to claim credits for tips paid to employees, and, in effect, raise hourly wages from $2.13 to $5.93 by late 2015.

Supporters note that the wage has not increased in two decades, even as the cost of living has risen.

Under current law, if workers do not earn the minimum wage of $8.25 an hour through tips, employers must compensate them to make up the difference. Voters approved a referendum in November increasing the state minimum wage by $1 to $8.25 an hour.

The majority of tipped workers are women, said Assemblywoman Shavonda E. Sumter (D., Passaic), one of the bill's sponsors.

"We have to make a statement. We have to send a strong message," said Okemfe Lebarty, staff organizer for New Jersey Citizen Action, a watchdog group. "This is something right. This is something that has to be done now."

Industry officials and restaurant owners told the Assembly Labor Committee that the $2.13 figure - the federal minimum cash wage for tipped workers - was misleading. Waiters, bartenders, and other service employees earn well above the minimum wage, they said. Increasing the minimum wage for tipped workers would drive up costs, forcing layoffs and higher prices for consumers.

"We'll cut the number of servers," said William Love, of P.J. Whelihan's Group, which owns five restaurants in South Jersey and others in Pennsylvania. "We'll add food expediters, runners. We'll put electronic devices on the table. This will cost our little company."

Love said tipped employees at his company's restaurants made $15 to $21 an hour.

"This would seriously threaten to put me out of business," said Craig M. Kunisch, who owns Mahwah Bar & Grill in Mahwah, Bergen County.

But Anastasia Braucht, a bartender and volunteer with the Restaurant Opportunity Center, said past employers often paid her less than minimum wage.

"We're not asking for a lot," she said.

The real problem, opponents said, was lack of enforcement. If employers aren't compensating employees in compliance with the law, workers should alert state labor officials, they said.

Workers face potential retribution, Braucht said in an interview. "What are we going to do, fight it?" she said. "Lose our job?"

The bill would phase in through 2015. Employers would pay 40 percent of the minimum wage at the end of 2014, and 69 percent of the wage by the end of 2015. As part of last year's referendum, the minimum wage also has a yearly cost-of-living adjustment.

The legislation must pass the full Assembly and Senate before heading to Gov. Christie's desk.

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