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Wednesday, September 13, 2006

Deducting Tips

Posted by on September 13 at 11:43 AM

The Washington Restaurant Association endorsed Mike McGavick today. (Thanks tipster Bethany Jean Clement…the Stranger’s restaurant critic.)

As the WRA states in their press release (I’ve linked it below), the endorsement is a nod to McGavick’s support for the recent GOP bill to support a tip deduction for wait staff.

That is: Management could have counted tips toward a worker’s wage, and slashed their pay accordingly. This could have brought service workers’ wages down to around $2.15/hour. The tip deduction would have hit about 120,000 Washington State workers who depend on tips—a $950 million wage hit. The Washington Dept. of Labor said the federal law would have trumped our state law prohibiting tip deductions.

Here’s the WRA’s take on tip deduction (or tip credit as they like to call it) from the McGavick endorsement:

Recognizing tips as wages allows employers to equalize pay in the back-of-the-house and balance the wages for employees working on both sides of the counter. Back-of the-house-workers wages have dropped by three percent since the 1998 minimum wage initiative. Tipped employees have increased by 48 percent. Today, on average, a tipped employee earns more than $19 an hour.

Anyway, read the WRA’s entire McGavick endorsement below.

> (Olympia, WA) - The Washington Restaurant
> Association (WRA) today announced its endorsement of
> U.S. Senate candidate Mike McGavick. By endorsing
> McGavick, the WRA leadership said it is looking for
> a change in Washington State's representation in the
> "other Washington" - one that creates a better
> atmosphere for jobs and the economy.
> "Mike McGavick is the candidate who best understands
> our issues and is looking out for all of Washington
> working families and businesses," said Anthony
> Anton, President and CEO. "With this endorsement,
> the WRA joins many other business organizations who
> agree with McGavick's approach to creating an
> atmosphere that encourages economic growth for
> Washington citizens."
> The WRA's endorsement comes after careful review of
> candidates' overall positions on business issues.
> Taxes, regulatory reform and slowing the growth of
> government are all priority issues for the WRA.
> Industry leaders view McGavick as the candidate best
> suited to promote a healthy economic climate in
> Washington State.
> The WRA has, for several years, been discouraged by
> congressional initiatives that put a
> disproportionate burden on small businesses.
> Leaders of the Olympia-based non-profit trade
> association said they decided to back Republican
> McGavick because of his strong support for small
> business and commitment to lessen the tax and
> regulatory burden on all Washington citizens.
> "Restaurant operators in Washington have the
> smallest profit margins in the country," said Anton.
> "We need someone who is interested in real solutions
> for our industry, not just election year politics."
> McGavick's opponent Maria Cantwell has recently made
> politically-motivated charges that congressional
> efforts to allow tips to be considered wages in
> Washington State would cut employee pay.
> "The congressional proposal to allow Washington to
> count tips as wages not only does not allow for
> cutting the minimum wage of tipped works, the
> Washington Restaurant Association would never allow
> such a pay slash and would vigorously fight any
> proposal that did," Anton added. "Tipped employees
> will always be able to not only make the full
> minimum wage but keep 100 percent of their tips. We
> are disappointment Senator Cantwell is playing
> politics with the livelihood of our employees and
> their families."
> "Recognizing tips as wages allows employers to
> equalize pay in the back-of-the-house and balance
> the wages for employees working on both sides of the
> counter. Back-of the-house-workers wages have
> dropped by three percent since the 1998 minimum wage
> initiative. Tipped employees have increased by 48
> percent. Today, on average, a tipped employee earns
> more than $19 an hour."
> The WRA will promote the McGavick candidacy to its
> 5000 restaurant and allied members throughout
> Washington State.

CommentsRSS icon

The notion that paying your front-of-house staff less has any impact at all on what you pay your back-of-house staff is ridiculous. You pay ALL your workers what you have to to get them to stay. The money not paid in wait staff wages will go into their pockets, and the "equalization" will consist of bringing everyone down to the lowest common denominator. Thus furthering the Republicans' long term goal of paying all workers the same wages as illegal immigrants.

Anybody ale to obtain a list of WRA meber restaraunts? There's nothing on their website.

I'd like to know where not to take my business.

so how much do waiters get paid in seattle? i waited tables all through college, and was paid $2.13 hourly. With tips, it worked out to about $700 a week, which is more than i'm making in a government job now.

If they can deduct the amount of the tip from a wait staff's salary can I deduct the amount of the tip from the price of the meal? Seems fair.

"Equalizing pay in the back of the house" is a bullshit argument. I used to wait tables in an East Coast state, where a tip deduction was allowed (my hourly was $2.13/hour), and my back of house coworkers still received shitty pay. I don't buy that argument for a minute!

The fact is that servers can make decent pay on tips (obviously it depends on where you are), but my morale and work ethic were higher when I was serving in Seattle. First, getting paid the full minimum wage offsets the assholes who don't tip anyone. Second, on a really slow day (like our last snow day), where you may have only one or two tables, at least you're being compensated for the cleaning and other busy work your boss finds for you.

Have fun with that, business owners. If workers are going to end up with the same take-home no matter how we tip, then there's no point at all in us customers tipping -- we'll end up helping you instead of the employee whose service we were rewarding.

Except that, under this scheme, if you don't tip the worker actually takes home $2.13 an hour. Lovely. Waiters at Canlis are not at risk under this proposal but the thousands who work in commonplace restaurants are.

America: Because if you can't force your workers to work for less and less each year, how can Jesus love you?


This is merely another ploy to pay people the lowest amount possible. If the goal was really to bring the wages of those in the back of the house (kitchen) then those people should be paid more, rather than reducing the server's wages.

I wait tables and yes, some nights we do make fairly good money. But others, I might walk with $10.00 in my pocket. The only thing that keeps me afloat is the minimum wage I get hourly.

I also would like to mention that taxing of tips is different to every restaurant (at least here, in Honolulu)....some of them tax based on 15% of the employee's total sales, assuming that everyone tips 15%. So, if you tip less, the waiter is being taxed on what they haven't recieved, thus taking money out of their pocket.

Really, I really want to know which restraunts belong to WRA. Stranger, get to work.

That 3% decrease in back-of-the-house wages since 1998 doesn't even make any sense if we're talking about the WA minimum wage, because since 1998 (when WA MW was $5.15) it's been indexed to inflation, meaning since the passage of I-688 there's always been an annual COLA factored into the formula. So how could those wages decrease? Unless of course, by the same token, non-tip income FOH wages also decreased by the same amount, for example due to the overall decrease in earnings value?

Any idea from whence that figure comes?

perhaps they earn, industry-wide, averaged amongst all (ie, chefs as well as bussers) more than minimum wage? Just a total guess. Regardless, that bill was just a piece of poo to give McGavick some talking points (ie, "Cantwell opposes living wages for restaurant workers, and opposes a sales tax deduction for working families." blah blah blah)

I think the decrease is because a lot of back of house employees stay in their jobs for a while, and eventually start making above minimum wage. Then the employer has discretion on cost of living adjustments.

@ konstantconsumer #3:
Minimum wage is currently $7.63/hr for all employees over age 16 in WA state.

Well FNARF clearly doesn't understand how the tip deduction works (somebody alert the media!); not that it stops him from weighing in with his ignorant opinions.

Realistically speaking, tipping, is not required and should not be considered wages.

Cutting the wages for FOH with the intention that customers will make up the difference has no relevance to the wages of kitchen staff. Restaurauteurs will use the law to pay all of their employees less and increase their profit margin. Besides, FOH usually tips out the kitchen staff or, if an equitable tip system is used, they are included in the division of the tips.

Usually, however, when laws like this are passed - the employer is required to pay employees the difference between the lower wage and the federal minimum wage if the employee is not making enough in equivalent tips. Unfotunately, this means that higher tippers are then making up for cheap bastards and the employeers. It really helps chain restaurants maximize profitability.



Feel free to weigh in with a correction, Just Sayin'. Because so far all you've offered is an ad hominem singling me out of a whole bunch of folks who seem to be mostly agreeing with me.

Waiters and bartenders make too much in this town! As your Congressman, I'll fight to take money out of their uneducated, sabbath-defying, coke-snorting hands. It's time to put money back in the pockets of self serving restaurant and bar owners who know what's best for everyone. I'm Mike McGavick and George Bush approves this message!

Dewsterling--in my experience, employers have to make up the difference, but not on a daily basis. I think it's amortized over a week (or pay period), which means that you have to have a REALLY SHITTY job before the employer has to make up the difference.

Read the actual bill, and the law it changes, and both industry groups' position papers. I just spent a half hour doing that, and not counting tips is a loophole, nothing more.

The actual bill:
(click Text of Legislation and scroll to the end of the index)

One thing is obvious: tipped staff still make at least the minimum wage. This isn't some corner case where people could get paid $2.50/hr. Both sides agree current average comp is $19/hr.

If that average isn't artificially inflated, then this change wouldn't change a thing. And if wages drop, it really was a loophole -- effectively, and industry-specific higher minimum wage.
(at least part propaganda, but not a bad intro)
(less propaganda, and a couple notable facts)

(removed the http links because of The Stranger's comment filter)

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