$2.13 Is the Tipping Point -- America's Food Servers Are Grossly Underpaid

[xchrom]

http://www.alternet.org/books/behind-kitchen-door-excerpt

Right now, earning $2.13 per hour, I don’t have enough for my kids, I can’t put them through college. I barely have enough to put food on the table.
—Server, Man, New Orleans

I’m not even worth one cheeseburger an hour.
—Busser, Man, Six Years in the Industry, Chicago

We don’t usually think of food service workers as poor, if we think of them at all.

I used to be a bad tipper. Even though I ate out frequently, I didn’t understand what tipping really meant. Part of me resented the whole idea. Weren’t servers being paid for their jobs? Why did I need to pay more than the price of my meal? Wasn’t service part of the menu price? I worked hard for my money, and eating out was a guilty pleasure, so feeling compelled to leave something extra just didn’t seem right. If I left $5 for a $40 meal, I felt good about myself.

It took me years to understand how tipping really works. First, I learned that my $5 is shared by many different people: the waiter who takes my order, the runner who brings out my food, and the bussers who clean my table and refill my bread basket and water. In some restaurants, the waiter has to ask a bartender to prepare the drinks, and a barback may assist. In the finest fine-dining restaurants, a captain greets customers and oversees the service they receive. All those workers get a piece of my $5.

Here’s the worst part: the federal minimum wage for tipped workers is $2.13 an hour. That means the federal government permits restaurants nationwide to pay tipped workers an hourly wage of only $2.13, as long as the workers’ tips make up the difference between $2.13 and the federal minimum hourly wage of $7.25. If the tips do not cover the difference, the employer is supposed to pay it. In 32 states, the tipped minimum wage is actually higher than the federal tipped minimum wage (e.g.,$2.65 or $4.25 an hour), and in 7 states the minimum wage is the same for tipped and nontipped workers.1 However, 13 states operate under the federal tipped minimum wage of $2.13, and another 8 states have a tipped minimum wage of less than $3.00 an hour. Thus, 21 states—almost half of the United States—allow restaurants to pay their employees less than $3.00 an hour. In several of those states, there is no state minimum wage at all. That means some restaurants in these states can get away with not paying their workers anything! As long as these restaurants bring in less than $500,000 in revenue annually (and therefore don’t fall under the purview of federal law), they can force their workers to live entirely off their tips.

[pipoman]

1. It is a problem in some restaurants

Not so much in many.

Thus, 21 states—almost half of the United States—allow restaurants to pay their employees less than $3.00 an hour.

Not true. Restaurant servers must make at least minimum wage.

Servers at my restaurant are the highest paid employees on staff, often earning more than I did as GM. They have a $3.33 base, $1 more than is required. With tips they usually earn over $12, and often earn over $15. Not get rich quick money, but far exceeds most entry level jobs in other fields in the area.

[el_bryanto]

2. Well that can happen

But it depends on the restaurant - and it depends on how full the restaurant is. And, crucially, it's not money you can count on consistently. If it snows really hard and the restaurant is empty for a week, waiters waitresses then have a lean week or two.

Bryant

[pipoman]

3. We don't share tips with anyone

but the host who distributes the tips. .When we didn't share with them, we couldn't keep hosts, they all wanted to serve.

[Ms. Toad]

20. You can consistently count on minimum wage,

Because the law requires the employer to make up the difference if the restaurant is not full, or you had crappy tables which did not tip. And in many restaurants (as noted) on a regular basis you make more.

That said, I think it is a lousy system - and waitstaff should be paid a living wage, and restaurants should charge what it takes to pay that wage. (But - every time I say that, it doesn't take very long for some waitstaff to chime in that they don't want to go to to straight hourly.)

A system which leaves everything to chance, and to the honesty of waitstaff in reporting tips to their employer and the IRS - and to the employer who (as noted below) can blatantly violate the law by requiring his staff to report tips they haven't received or (I'm sure is the implication) be fired, and shifts the employer's burden to pay its employees to patrons of the establishment stinks, and is an invitation to game the system. When, as inevitably happens, people do game the system it creates both resentment at the gaming - and (rightfully) outrage that the system which is structured so that it needs to be gamed in order to make a living.

[marble falls]

9. And your restaraunt isn't typical.

[PotatoChip]

23. It's been true in most states as recently as Oct. 2011

Thanks to Herman Cain.

Minimum-wage protections are an issue Cain knows intimately. In his work as the CEO of Godfather's Pizza and later as president of the National Restaurant Association, Cain worked diligently in Washington and in the media to see that low-wage restaurant workers could legally be paid as little as possible, as In These Times has noted. In fact, Cain's time in the restaurant business was marked by a long and largely successful battle against minimum-wage increases, and even today, some 15 years later, many of the nation's waiters and waitresses have Cain and the restaurant lobby to thank for a federal minimum wage of $2.13 for tipped workers.

http://www.huffingtonpost.com/2011/10/27/herman-cain-minimum-wage_n_1035157.html

[Fumesucker]

4. The problem is that Congress also works for tips and the ones tipping them don't tip anyone else

[Scuba]

5. +1

[daleanime]

6. +1

[Bettie]

7. This is why I always overtip (according to people who go out with me)

But, if someone is nice enough to bring me a meal and chat a few seconds, they deserve to be paid for the job. Ideally, they'd make a living wage, but since they don't, I tip what I can afford.

[marble falls]

8. I have a collection of $0 pay checks. I've had owners tell me how much tips I had to declare....

on bad nights so they wouldn't have to make up to minimum, one of them telling me "it wouldn't be fair" if he had to.

[Ms. Toad]

14. Assuming you did not make the amount you were told to declare,

that is blatantly against the law.

[marble falls]

28. I have always declared my income accurately. That means my social security check is a lot ....

more than the majority of waiters, who get less because they under-declared. I am talking about nights and lunches we tanked at. I live in a resort area we have fat seasons and we have dead seasons including Lent. I paid taxes on money I never got and I paid taxes on money I tipped to expeditors, busboys, cooks (my choice), bar, and hostesses. $15.00/hr sounds grand but that's day by day on five shifts of five to six hours that includes and hour or so of "side work" that means I make trays of salads, dressing, garnishes, sauces and portioning. I mop kitchen floors for a half hour before going home, too. On dead nights for $2.13 I scrub chairs, move furniture for cleaning washing mirrors and windows. And then get sent home early and told how much money to declare I did not make and get to pay taxes on on that phantom money.

I was also a single custodial dad of two kids.

My experience trumps your doubts. I also have doubts about waiters where you worked that out earned GMs.

[Ms. Toad]

29. On those dead nights,

your employer is violating the law by requiring you to declare tips you have not earned - and your employer is required to pay you the difference. Whether you rock that particular boat as an employee is a difficult decision - but as a former employee (based on your verb tense and current social security), if you are still within the statute of limitations and you have kept good records, you might consider making a formal report of the violation of labor laws in order to make life better for those who are still being illegally required to report tips they are not earning..

As for reporting tips you actually take home, you have the power to remedy that. You are correct - it will mean a lower social security check in the long run - an issue your fellow waiters who are not reporting all of their tips often don't think about. My sister - a hair stylist - who has never reported all of her tips is living paycheck to paycheck recently due to a scuzzy ex who left her with debts. She will have to work well into retirement in part because her social security income will be based on reported income rather than the amount she was actually earning.

But, as to the remedy, the form you (or anyone in that situation) needs is Form 407A (http://www.sfs-md.com/images/form-4070-tips1.pdf)

I did taxes for a number of years - and never encountered a single tip earning taxpayer who tracked and reported on their tips beyond what was allocated to them by their employer.

(You also seem to be responding - in part - to someone other than me. I didn't come up with the $15.00/hour figure, or say anything about GMs. My contention was only that your employer was violating the law by requiring you to report tips you did not earn.)

[marble falls]

31. Yep. My employers broke whatever laws their lobbiests couldn't get sweetened. And I watched ....

them fire and blackball waiters who got up on their legs to complain. And I never heard of any of my employers get gigged in any way over it. One of the last places I worked - about ten years ago - one of the nicest places in Austin, I got a raise from $1.13/hr to $2.13/hr and I thanked the owner for the raise not knowing (and he didn't tell me) the Feds forced him to give me. I was probably lucky he didn't fire me thinking I was a smart ass and/or the employee who turned him in. Don't tell me that retaliatory firing is illegal. It happens anyway and the employers all get away with it. The only time I ever felt I wasn't being used and abused was many years ago when I worked in a union shop and the AFL/CIO took care of us well.

There seems to be a nasty perception of tipped workers, that we make reams of money, cry "poor" and somehow don't earn our wages. I am sorry if my sensitivity about that made my interaction with you a bit rough. Because of your profession and your sister I know you might know more about the financial reality of what we face than 99% of folks. Thankyou for your interest in what we face.

[Ms. Toad]

33. I know the financial reality -

athough not personally. Through friends and family members. There are some who make bundles (realtively speaking) and many of those who do don't report it. But making bundles is dependent on a lot of things beyond your control, including having a boss who plays fair and doesn't insist you report tips you don't make, doesn't assign you only the AM or graveyard shift, working in a place which attracts people who have enough money to tip and enough social conscious to actually use their money in that way.

The only group of people who made me edgier at tax time were the people who had been paid as independent contractors, but who were really employees who should have had taxes withheld. They thought they'd had generous wages until I told them they had to pay ~15.3% of the money they no longer had for social security,and another 15% (generally) for a variety of local, state, and federal taxes.

[marble falls]

34. thanks for helping us all out, she who cares for my brother takes care of me.

[Egalitarian Thug]

35. Yes it is, and that brings us to the next topic. Just try to have those laws enforced. n/t

[Ms. Toad]

36. Yup.

Best bet for enforcement is a complaint by a recently no-longer-employed person (or more than one) to the labor department. Because you know any current employee won't be an employee long.

Same dilemma faced by employees who are being paid as independent contractors when they face their first tax hit. I could have them use the tip form to report their income and save 7+% in SE taxes, but that was an immediate flag to the IRS to go collect the other half from the employer. (And filling out the SS8 to request a formal determination had the same result without the benefit of saving the taxes in the first place). Not the best move for making an employer happy - but in some instances it was the only option when the unexpected tax bill was higher than they could pay.

[Egalitarian Thug]

37. Trust me on this, in large areas of the country even the pathetically weak labor and wage laws

that we do have are simply not enforced.

When the people elected and appointed to enforce them refuse do their job, the people we're talking about have no recourse at all, and this happens every day.

[ReRe]

10. I think the wait staff....

.... in all restaurants should be paid at least full minimum wage. The wait staff are on the front line when it comes to running a restaurant. There's more to it than just taking an order and serving it. And not everyone is cut out to do it. I was a waitress when I was young and it was one of the most rewarding jobs I ever had. I met people from all over the world and worked with some of the greatest people that ever walked this earth. And there was NO turn-over. We worked our butts off every day. Everyone I am related to are good tippers, as they remember the time I was a waitress. The rule I taught my children was that if you can't afford to tip,
then you don't go out to eat. Period. And it stuck.

[Jenoch]

32. Minnesota (where I live) and a few other states

require waitstaff to be paid at least the minimum wage.

[ReRe]

39. Well, good on Minnesota...

... and the other states that do pay full minimum wage for waiters/waitresses!

[AtheistCrusader]

11. Move to Washington.

We don't fuck around. This state has great safety nets, and the minimum wage is just one of them. We don't exempt wait staff from the state minimum wage, and ours is the highest in the nation. $9.32/hour. Driven yearly adjustments by CPI.

The ONLY exemption is 14- and 15-year-olds may be paid 85% of the minimum wage ($7.92) as youth/minor training workers.

Tipped and agricultural workers all get FULL state minimum wage.


I'd feel like a shitbag if I knew my server might be making a fraction of the federal minimum wage without me maybe or maybe not picking up the slack.

Tips should be service incentives, not sheer survival.

[CTyankee]

13. When I ravel to Europe I tip very little because wait staff are paid a good deal more than what

we pay here. Still, I like to leave them something extra because I am an American and I feel guilty, even tho the travel guides always tell you that the waiters are not expecting much of a tip. I consider it an appreciation of the service provided to me and of course, they are happy that I do.

[Eleanors38]

17. That is the way to go! In Texas, I tip fast-food (when I occasionally eat it) workers

because I know they make crap wages. When it's slow at my regular spots, I tip more than 20%. IIRC, at the end of the 60s, there was legislation passed to put all ag & food service workers under the min. Wage law. Nixon vetoed it. His campaign got a fat contribution from McDonalds, one place I don't patronize for several reasons.

[marmar]

12. k/r

[LittleGirl]

15. I was a waitress when the minimum wage was 2.01 an hour

and I thought a bad night was making less than 10 bucks an hour in tips. Some nights, I'd get two tables and would walk out with 5 bucks in tips after 2 hrs. I hated working those nights. I had to work two jobs for a while when I was 25 and had strep throat for 5 months and couldn't shake it. My doctor told me I needed to quit one of my jobs and the waitress job was where I had health insurance. I quit that one and risked going without health care.

I had a collection of 0 paychecks because once I added all of my sales together and then taxes and insurance was taken out, there was 0 left. Some of my checks were -0 meaning that I owed the company for my health care and taxes. I only had to share my tips when we had big days like Mother's Day, New Year's Eve, Thanksgiving etc.

I just looked up my earnings statement from 1984 when I was 25 and had strep throat for months. My total earnings were
$5,795 and that was working two jobs. That wasn't net, that's what I earned according to Social Security. That was not what I took home. I made 3.35 an hr at the second job.

I was living alone, had a car payment and rent was 400 a month with utilities included. I had a tooth abscess and had to ask my Mother for the 300 dollars for the root canal.

The good ole days!

[Eleanors38]

19. That sucks. I hope it's better, now.

[SomethingFishy]

16. It's my understanding that the Feds made some kind of deal with the Resturant Association

to keep the federal tipped workers wage at 2.15 an hour.. Forever. From Wiki:

The National Restaurant Association, widely referred to as "the other NRA", is a powerful lobbying force in Washington and state capitals. It is very active in fighting efforts to raise the minimum wage, as well as laws requiring paid sick leave. In July 2013, it boasted that it had successfully lobbied against and stopped raises in the minimum wage in 27 out of 29 states, and blocked paid sick leave legislation in 12 states.[5] It also takes credit for preventing any increase in the federal minimum wage for tipped employees, which has remained at $2.13 per hour since 1991

[ScreamingMeemie]

18. It is a HUGE problem with Sonic Drive-Ins. My daughter worked for Sonic and made server wages.

The problem is, a lot of people look at Sonic as "fast food" and therefore there is no need to tip even though she skated your food out to you, took your payment and processed it, and returned to your car/table to see if there was anything else you needed.

Luckily, the Sonic that she worked at had bunches of regulars who tipped well. The Sonic by my house? Not so much. I was horrified to find out my cousin/neighbor has never tipped a Sonic server.

Remember... they are only paid pennies an hour. While the restaurant is required to make up the difference, a server not making up the difference in tips is put on probation and then fired.

Enjoy your Orange Cream Smoothies and tip responsibly.

[Eleanors38]

21. People have the suckiest reasons for not tipping.

Take-out customers think they are exempt from tipping. It's often more of a pain to prepare, sack up, check an order, and stop other services to clear a take-out -- all for nothing.

[mountain grammy]

22. K&R never less than 20% and always in cash!

[karadax]

38. 30% here for the trifecta: fast service, good food and kid friendly.

The instant win for anyone anywhere is if they front load our table with a mountain of napkins for our kids spills. I also make write notes on the receipt for superior service.

The cash thing I oppose. Under-the-table tips if unreported help one at the expense of the other. Always a paper trail.

[AnneD]

24. Anyone that has worked in food service....

learns how hard it is. I have always tipped and tipped generously. I tip 20-25% minimum. I get pissed because I feel that I should not make up for the cheapness of the boss. Food service workers should be paid a decent wage. Tips should be extra, not instead of salary.

I tend to eat at the same places, and the staff know me. I took my Mom (who was visiting), to my favorite spot. Despite the crowding, we were seated promptly, I was greeted by name, and we received excellent service. Mom was impressed with the royal treatment. I had to laugh. We were treated like rock star royalty that night.

God help me, I even tip at a drive through sometimes. Now there are some folks that really need it.

[xchrom]

25. there you are! you know we've been asking after you. nt

[Smarmie Doofus]

26. Kick, Rec. nt

[Enthusiast]

27. Kicked and recommended a whole bunch.....nt

[TorchTheWitch]

30. It's hardly just food servers

Any job where tips are received are stuck with this shit salary. That's a LOT of jobs besides serving food.

[wildbilln864]

40. I was a manager at Shoney's in 1985 in SC...

& waitresses made just $2.01/hr then plus tips. I thought that was too low then.