Pooled Tips Top Of Mind As Lawmakers Weigh Ballot Question
Top Dem “A Little Confused” by Opposition to Wage Increase
STATE HOUSE, BOSTON, MARCH 12, 2024…..As hospitality workers clashed Tuesday over the best way to ensure livable wages for restaurant staff, some lawmakers questioned whether a proposed tip-sharing arrangement could wind up inadvertently harming pay for waiters and bartenders.
Opponents warn the idea of requiring shared tips lacks guardrails to ensure that only certain employees are eligible for the additional income. Supporters say pooling together tips fosters unity among restaurant staff and can combat harassment among workers that is partly fueled by disparate pay scales.
The proposed ballot question to gradually raise the $6.75 hourly minimum wage for tipped workers until it equals meet the state’s overall $15 hourly minimum wage contains a controversial provision to allow employers to administer a “tip pool.” Tips earned by customer-facing employees would flow into the pool, which employers could then redistribute to all personnel, including back-of-house dishwashers and cooks.
Rep. Ken Gordon, a member of the special committee tasked with evaluating potential ballot questions, asked whether the tip-pooling mechanism was the right solution to boost pay for back-of-house workers, particularly if it could detract from waiters’ pay.
“It just seems to me that if a worker is making $17 an hour and is now being required by the employer to contribute toward paying the minimum wage of the back of the house because they’re entitled to that, or they make minimum wage but they split that with more people, they’re obviously going to get a lower raise if there are more people in the pool,” Gordon said.
The $17 figure, the average hourly wage including tips for bartenders and waitstaff, was provided by Jeannette Wicks-Lim, an associate research professor of the Political Economy Research Institute at UMass Amherst.
Opponents of the ballot measure say servers can typically make about double the minimum wage — if not even more — when factoring in their tips.
Under the state’s existing pay structure, restaurant workers depend on gratuities to bring them up to the $15 hourly minimum wage. If their pay falls short of that amount, employers must make up the delta.
Wicks-Lim said the vast majority of bartenders and waitstaff are women, with more than a quarter who are raising children. Increasing their pay would slash staff turnover, Wicks-Lim said, which would also save labor costs for employers who wouldn’t need to hire and train more staff.
While restaurants may raise menu prices to absorb the cost of covering higher wages, Wicks-Lim said that change would translate into higher tips from customers.
If voters approve the ballot question, customers would still be allowed to tip. Customers continue to give gratuities in states and cities that already require employers to pay tipped workers the full minimum wage, experts and supporters say.
One Fair Wage, which represents nearly 300,000 restaurant and service workers, supports the tip-pool arrangement. The group’s morning press conference on the State House steps was interrupted when opponents — who had an event scheduled there directly afterward — started chanting “save our tips” and drowning out remarks from Sen. Pat Jehlen.
Alison Kuznitz/SHNS
Proponents say raising wages would curb wage theft, spur growth for the restaurant sector, promote “gender justice,” and reduce sexual harassment among waitresses who may endure bad behavior from customers to ensure they earn enough in tips.
“We didn’t even know the word harassment. It happened all the time,” Friedman said. “There is a certain amount of empathy up here.”
Lawmakers can approve ballot questions or offer substitutes. If the Legislature does not take action by May 1, sponsors must collect more signatures from voters to get their questions onto the November ballot.
The leader of the Committee to Protect Tips, the newly formed group that opposes the ballot question, said his restaurant workers are “very well compensated,” earning between $30 and $40 per hour. Doug Bacon, who owns seven Boston restaurants, said operators may need to lower certain staff pay, such as for dishwashers, to cover the full minimum wage for others.
Restaurant owners may leverage the tip pool as they reconfigure wages and essentially create a surcharge for customers, he said.
“It even opens up an opportunity, as the proposal is written, for a restaurant owner who chooses — and again I’m not saying I would do this — to include a manager, a bookkeeper and a cleaning team in the tip pool,” Bacon said. “Now my guests come in and they want to tip the people who provide them service and hospitality. They don’t want to tip the people who are working in the office or who are cleaning the restaurant in the morning.”
Sen. Ryan Fattman asked One Fair Wage members to clarify how the tip-sharing measure would achieve “gender justice” if mostly female waitresses were required to share their tips with back-of-house staff who are primarily men.
“In the proposal, you potentially are taking tips and spreading them across both sides of the house, which would therefore take money away from women,” Fattman said.
Saru Jayaraman, president of One Fair Wage, said the ballot proposal would raise pay for waitresses and other front-of-house staff by nearly $9.
“Then once that happens, it allows for the option, as already occurs in some states, for tips to be shared not 50/50, but as you would share with a busser or runner which already happens in the front of the house, also share some with the back of the house because not everybody’s getting a full minimum wage with tips on top,” Jayaraman told Fattman. “You’re saying it’s $17 and you’re sharing the tips. You’re forgetting that there’s a massive wage increase that would occur with front of the house, where it’s mostly women working in very casual restaurants and bars.”
Nearly three hours into the legislative hearing, co-chair Friedman told opponents that she was confused by their narrative and concerns. Friedman reminded them the ballot initiative would not eliminate tips for hospitality workers, and that it would not require a tip pool.
“I’m a little confused. I have to be really honest,” Friedman said. She added, “So what’s going on here? I’m confused.”
Bacon said installing major pay hikes — particularly if lawmakers later decide to increase the minimum wage further, such as to $20 per hour — would amount to an “earthquake event” that could upend the restaurant landscape.
“I can tell you with 100 percent certainty that no operator can absorb a 200 percent increase in the cost of having a server or a bartender, so we’re going to raise our prices or change our staffing and our business model,” he said.
The Massachusetts GOP and the Massachusetts arm of the National Federation of Independent Business also issued statements Tuesday condemning the proposal.
“In examining the ballot question, it becomes apparent that individuals working in the service industry would likely experience a decrease in their earnings, and potentially face layoffs due to the financial strain on restaurants unable to sustain current wage levels supplemented by tips,” MassGOP Chair Amy Carnevale said. “Moreover, mom and pop restaurants will confront challenging decisions, including staff reductions, price adjustments, or even closure.”
