Once again, Portland tipped workers are fighting for tip credit preservation. We continue to fight because it’s worth it.
The tip credit is a subminimum wage that allows employers of tipped workers to pay less than the minimum wage, provided the difference is made up in tips. Question D on the Portland ballot would eliminate the tip credit. Sean Locke Photography/Shutterstock.com
I’ve worked at Bruno’s Restaurant and Tavern for 14 years and have been waitressing for 10. There is a lot of confusion about Question D, and my goal is to help eliminate that confusion so voters can feel they’re making an informed decision.
Defining “tip credit” seems like a good place to start. Claiming a tip credit is a legal way for employers to count employee tips toward minimum wage. Under the current system, restaurants are legally allowed to pay tipped employees half the amount of the local minimum wage. For example, right now in Portland, minimum wage is $13 an hour, or $6.50 for tipped employees. The expectation is that the employee will earn the difference in tips (plus more). If, for some reason, the employee does not make enough in tips to make up the difference and meet the full minimum wage, then the employer is still legally required to pay the employee the full minimum wage. I can only speak for myself, but I’m certain this has never been the case in my 10 years of serving. I typically make three times the minimum wage an hour.
The problem with D is not the minimum-wage increase but, rather, the elimination of the tip credit. While a higher minimum wage is important, it should not come at the expense of the tip credit, because it doesn’t have to. These two things do not need to be tied together and that’s key.
To eliminate the tip credit assumes a massive risk for both businesses and employees. The hundreds of thousands of dollars in unseen additional payroll expenses will have to come from somewhere, which could result in an added service fee (that will not go to the server) and/or significant increases to menu prices. This will undoubtedly push customers away, causing businesses to make the difficult decision to let go of support staff such as hostesses, busboys and food runners. They may be forced to cut workers’ hours because it’s too expensive to operate or close altogether. Keep in mind restaurants are still struggling with the residual effects of COVID’s impact, skyrocketing inflation and an ongoing labor shortage. Eliminating the tip credit has the potential to put thousands out of work and, at the very least, cause tipped workers in Portland to take a massive pay cut. Those in support suggest that customers will continue to tip, but that cannot be assumed. There’s too much at risk to vote on assumption.
I support small-business autonomy in Portland – if there are restaurants that choose to operate under a business model with tip credit elimination, then that’s their choice. However, that does not mean it will work for every establishment; it’s not a one-size-fits-all business model. Each business is unique with its own operating costs, expenses, size, number of employees, dining and food styles; too many factors to all be put in the same box.
As a tipped worker and lifelong Portlander, I encourage you to listen to the workers who are saying this will end up hurting those it claims to help. Please vote “no” on Question D.
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