Restaurants want lower minimum wage for tipped employees

SALEM, Ore. — Oregon restaurant owners and their wait staffs squared off yesterday over whether restaurant owners should be allowed to freeze the minimum wage for servers who earn a portion of their salary in tips.

Oregonians in 2002 passed a measure to raise the minimum wage and require that it be revised annually in line with price-index changes.

But under a restaurant-industry-backed bill heard yesterday, the minimum wage would be kept at $7.25 per hour for workers who earn $30 or more a month in tips.

Restaurant owners argued in a public hearing that the bill would make wages more fair for cooks and other restaurant employees who do not earn tips.

But union groups and employees said the bill undermines voter-approved minimum-wage laws, which guarantee inflation increases for minimum wage.

Bill Perry of the Oregon Restaurant Association said the bill wouldn't decrease wages for servers but would hold the minimum-wage rate steady, which would allow restaurants to pay untipped employees more.

"[This] will not make servers make less money," Perry said. "There's nothing that moves these people backwards."

Perry said servers currently make an average of $17 per hour including tips, and that Oregon is one of only seven states without a so-called tip credit.

"We're not saying that the servers don't deserve their tip income," Perry said.

"The question is, how do we get a fair wage to the back-of-the-house employees?"

The group also has argued in the past that automatic increases hurt the restaurant industry.

But Dee Ette Peck, a waitress and divorced mother of two, told the House Business Labor and Consumer Affairs Committee that she struggles to cover the bills for her family, even with tips.

"I count on my paycheck every two weeks" to pay the bills, she said, adding that she can't rely on unpredictable tip levels for her monthly budget.

Peck said if the bill were to pass, she might have to get a second job to provide for her family.

"No one is getting rich on minimum wage," said Tim Nesbitt, president of the Oregon AFL-CIO.

Nesbitt said the AFL-CIO estimates that servers earn closer to $10 per hour when tips are factored in.

Nesbitt said that when servers make more, cooks make more, and said if the bill had passed last session, all restaurant staff would now make less money.

The bill would also allow employees under 18 to work for a reduced minimum wage for the first 60 days of their employment.