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    State
    Monday, June 24, 2024

    Conn. moves closer to getting rid of tipped wage for restaurant workers

    With the restaurant industry largely back on its feet after the coronavirus pandemic, a key legislative committee voted Tuesday to increase the minimum wage for workers who receive tips.

    For years, Connecticut has had a two-tiered system where about 70,000 tipped workers currently receive a reduced minimum wage because their tips boost their overall compensation beyond the minimum wage.

    But Democrats on the state legislature’s labor committee voted to gradually eliminate that system over three years and pay workers the regular minimum wage that is currently $15.69 per hour in Connecticut. The federal minimum wage remains at only $7.25 per hour, and workers argue that Connecticut needs increased wages as a high-cost state.

    Opponents argued that the proposed change would amount to a 125% wage increase over several years to be paid by Connecticut restaurants. Advocates, though, countered that the wage has been stagnated for so long that a large increase is necessary.

    Republicans repeatedly cited a survey that was released by the state restaurant association, which said that the servers prefer the current system and do not want to change it.

    Rep. David Yaccarino, a North Haven Republican and longtime small business owner, ripped the bill as a bad idea.

    “In the industry, the workers don’t want it. They don’t need it,” Yaccarino told colleagues during the meeting. “Government says they need it. … With all due respect, this is one of the worst pieces of legislation that I’ve seen in my life. It will cause people to go out of business. The restaurant business is very difficult. In good conscience, this is a horrible piece of legislation. That is all I have to say.”

    Rep. Tim Ackert, a Coventry Republican, said restaurant workers are making “a pretty good wage” in a difficult industry.

    “Changing the law now isn’t going to make those employers any better,” Ackert said. “It’s not a windfall business to own. … There probably will be a fee in lieu of a tip.”

    But state Sen. Julie Kushner, a former union leader who co-chairs the committee, said restaurants will not be able to charge a fee with no explanation because the new law “will require what the service fee is for.”

    “We don’t assume that it is going to happen in every case,” Kushner said, noting that she has eaten in restaurants in other states with similar laws on tipped wages and has not seen a fee.

    State Rep. Steve Weir, a Hebron Republican, said some of the advocates at a recent public hearing were from out of state, but many restaurant workers who receive tips in Connecticut do not want to see change. Under current law, servers whose tips are too low are guaranteed the minimum wage that must be paid by the restaurant owner, though employees say that doesn’t always happen.

    “Any employee is guaranteed to make that minimum wage by telling the owner that did not meet that minimum hourly wage,” Weir said. “The owner is going to end up raising prices. … People in the industry today like it the way it is. … You see a lot of restaurants come and go. It’s a tough industry.”

    Restaurant prices are already high enough, he said, noting that he has seen hamburger prices at restaurants at $12, $16 or $18.

    State AFL-CIO president Ed Hawthorne, who represents 250,000 workers in a variety of industries, said recently that restaurants have benefitted greatly by keeping the subminimum wages that they pay to their workers frozen since 2017.

    “If tipped subminimum wages had continued to be tied to the full minimum wage, servers would be earning $9.92, and bartenders would be earning $12.79,” Hawthorne told the labor committee. “That means employers are saving $3.54 per hour, per server and $4.56 per hour, per bartender. That’s a 36% wage discount. Put another way, employers of tipped workers pay them just 40% of the minimum wage. No other industry profits as much on the backs of its workers.”

    As the economy has rebounded from COVID, restaurants are back in business after suffering huge blows during the pandemic when many customers stayed home for fear of health impacts.

    Connecticut would not be the first to change the system. Seven other states, from California, Oregon, Washington and Nevada to Minnesota, Montana and Alaska, and places like Washington, D.C., Chicago, and Flagstaff, Ariz., have passed the phaseout of the subminimum wage.

    Scott Dolch, president of the Connecticut Restaurant Association, said that a survey of more than 200 restaurants conducted by the restaurant association last year showed that “the average server in Connecticut makes $33 per hour,” and the average bartender makes $38 per hour.

    Dolch previously released a recent survey of 446 bartenders and servers that was conducted in February 2024.

    The survey, Dolch said, showed that 96% of those polled favor the tip system, while 95% of those surveyed “feel that servers and bartenders will earn less income if this bill were to pass.” In addition, 91% in the poll currently earn more than $20 per hour — with 61% earning more than $30 per hour. Those polled included many veteran workers, including 55% who said they had 10 or more years in the restaurant business.

    The lowest tips, officials said, are often paid in well-known chains like IHOP and Denny’s, while the highest tips are at upscale restaurants.

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