BY THOMAS H. JONES – I and my fellow restaurateurs would have been paying all our dishwashers and kitchen help well over $9 per hour years ago if the state minimum wage law allowed for a reasonable tip credit. The Hawaii State Legislature’s failure to consider tip income as part of a tipped employee’s full wages is the reason so many restaurant industry back of the house employees wages are so low. The Hawaii Restaurant Association has submitted realistic tip credit bills to the legislature year after year with no results. When will the legislators realize that increasing the tip credit will have little impact on the total income of tipped employees and allow restaurateurs greater latitude to pay the kitchen staff much higher wages?
Not taking at least 25% of tip income into account when calculating minimum wage for tipped employees is irresponsible, if our legislators’ intent is to increase the working class wages above minimum wage. For the past 3 decades, Hawaii’s minimum wage law has forced employers to increase the pay of the many highly tipped employees at the expense of those who wash the dirty dishes. Failure to increase the tip credit provision of the minimum wage law is counterproductive to helping restaurant owners to increase the wages of all their employees above the minimum wage.
The Governor stated that 19 other states have higher minimum wages. Well, 28 states have the same $7.25 per hour minimum wage. So we are currently in the majority on that point. Interestingly however, 19 states have per hour tip credits of $5.12 to $5.48, 5 states have tip credits of between $4.36 to $4.98, 13 states have tip credits of $3.00 to $3.99, 5 states have tip credits of $2.25 to 2.90; while Hawaii’s tip credit is 25 cents.
Some 42 states recognize that tipped employees do not need the same minimum wage as untipped employees as long as they make up the difference in tips. The HRA has asked for a tip credit of not more than 25% of the hourly tips claimed by the employee as tip income and an employer paid wage of not less than $5 per hour. That means that a tipped employee being paid a tip credit wage of $5 per hour ($7.25 less $2.25) by the employer would have to be making at least a combined $14 per hour in tips and the employer paid “tip credit minimum wage” ( $5 wage + $9 in tips). Does a $2.25 cent tip credit against a guaranteed $9 per hour tip income sound unfair? That is still well below the norm for tip credits nation wide.
Gov. Neil Abercrombie has spoken with pride that he worked in the restaurant industry as a waiter in his youth. Therefore, he knows first hand how much tip income servers can make. It would be really something if the Governor could explain this to the State House and Senate members and help restaurateurs pay more than his proposed $8.75 to kitchen workers without increasing the minimum wage. The HRA has been trying since the 1980’s to get the legislature to help its members pay their kitchen employees a maximum wage.
We really would not need a minimum wage if the legislature would stop monkeying around with the economy.
Thomas H Jones is the President of the Hawaii Restaurant Association