The US Department of Labor has decreed restaurant owners have the right to grab any money above minimum wage. The additional money now earned by the 140,000 waiters and waitresses in New Jersey can be demanded by their employers to use as they want.
What’s the point of tipping? Everybody does it. You tip servers, porters, valet parkers, bartenders, drivers, and a whole bunch more. You have to be really dissatisfied or really cheap to avoid giving that extra something above the bill. But why do it?
From the tipper’s point of view, tips are to reward someone for service above and beyond. The better you’re taken care of, the better the tip. So it’s not only a thank you to recipients, but also an incentive for them to improve.
From the recipient’s point of view, it could be the difference between making a living or not. Especially for workers in New Jersey restaurants and bars.
Here tipping can be the biggest part of a server’s income. Restaurant servers in New Jersey don’t even get regular minimum wage. There’s a special law requiring employers to give only $2.13 an hour because it’s assumed servers will get enough tips to bring them above the $8.60 an hour other workers get.
Now the US Department of Labor has decreed restaurant owners have the right to grab any money above minimum wage. The additional money now earned by the 140,000 waiters and waitresses in New Jersey can be demanded by their employers to use as they want.
The Department of Labor report says tipping amounts to about $5.8 billion a year in the United States and that money could be used in other ways. For instance, owners could use some of the tip money to pay kitchen workers better wages, although there’s nothing in the proposal that would require them to do so. Or owners could use the money to redecorate, offer happy hour specials for regular patrons, or take their spouses on Caribbean vacations.
But Labor says that no matter what they do with the money the new system offers “potential benefits to employees and the economy overall.”
Hard to see how it would help employees. More likely it takes food off their tables, clothes off their backs, and crams them into unsuitable living conditions. More harm than help.
About 3.2 million Americans wait and bus tables and bars, working long and hard for low wages. The possibility of tips is what makes the drudgery worth the effort. Turning over tips to employers isn’t going to be a popular idea with them, even if owners promise to use the money to upgrade working conditions. The people who bring food to our tables need to eat, too.
There was no cost-benefit analysis attached to Labor’s proposal and there was only a 30-day comment period. The Department rushed this through.
The hurry could have been related to a case pending before the US Supreme Court. Back in 2011 the Department of Labor issued a regulation preventing businesses from grabbing tips from servers, pooling them and sharing with kitchen staff who are generally underpaid, as well.
When the restaurant industry challenged those regulations, federal courts across the country authored different rulings, so the Supreme Court was set to resolve the issue. The new regulation made the issue moot and will probably set off a whole new round of lawsuits.
The new rule could backfire, however. If restaurant owners really reduce income for their servers, only desperate people will take those jobs. Service will decline. If drinkers and diners realize tips don’t go to the waitstaff, a few will quietly slip a few bucks to the waitress, but most would lower the percentage or cut out tipping altogether figuring if owners wanted more money, they could just raise prices.
And inevitably, they would.
A former Assemblywoman from Jersey City, Joan Quigley is the president and CEO of North Hudson Community Action Corp.
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