Posted on 08/03/2006 6:33:31 AM PDT by NormsRevenge
WASHINGTON - Hundreds of thousands of California waiters, hairstylists, bellhops and other workers who rely on tips to boost their incomes could see their wages slashed under federal legislation the U.S. Senate could take up by Friday.
The House already passed HR 5790, a far-reaching bill that would raise the federal minimum wage for the first time in nine years, reinstate tax cuts for teachers and those who pay college tuition and reduce estate taxes for the richest of Americans.
But Democrats are blasting a provision in the GOP-written bill that would require that tips be counted as part of a worker's minimum wage, overriding laws in seven states, including California, which count them separately and require that employers pay the full minimum wage.
In California, workers who receive tips now receive the full minimum wage of $6.75 an hour plus tips.
Democrats say that if the bill becomes law, California minimum-wage workers would be paid a base wage of $2.13 an hour, plus tips. The tip money would be used to make up the $4.62-an-hour difference.
"This bill is horrible for our people," Sen. Barbara Boxer, D-Calif., said Wednesday. "It's a pay cut for hundreds of thousands in our state and other states."
The National Restaurant Association, which opposes a minimum-wage increase and fought for the tip provision, and Republicans dispute the Democratic interpretation. They say the legislation is only intended to have an impact when the states in question increase their minimum wage -- at which point the increase would come out of a worker's tips, not an employer's payroll.
In other words, if California's minimum wage were to increase from $6.75 to $7.75 an hour, then restaurant owners and other employers whose workers receive tips would receive a tip credit of $1, John Gay, senior vice president for government affairs and public policy for the National Restaurant Association, said in a statement.
But the nonpartisan Congressional Budget Office and the Congressional Research Service both dispute that claim.
The provision "would preempt the minimum wage laws of states that exclude tips from being considered as wages in determining if certain employees have been paid the applicable minimum wage rate," said Donald Marron, acting director of the Congressional Budget Office in a written analysis of the legislation.
The bill's future in the Senate is still in question. Republicans must break a Democratic filibuster in the Senate. Republicans late Wednesday were adding provisions popular with Democratic senators in hopes of enticing them to support the bill.
Senate Majority Leader Bill Frist, R-Tenn., urged the Senate to break the logjam, saying that if they didn't, the legislation wouldn't be heard this year.
"That means we would have no permanent death-tax reform, no tax policy extenders and no minimum-wage increase," Frist said Tuesday. "It's now or never."
States that have minimum-wage laws similar to California's are Washington, Oregon, Nevada, Montana, Minnesota and Alaska.
Clarification Sought
In a letter sent to Frist on Wednesday, a Labor Department official said the department would interpret the bill's language as protecting current wages for tipped employees in the seven states.
Victoria Lipnic, assistant secretary of labor for employment standards, offered in the letter to work with lawmakers to clarify the intent of the legislation -- something several Republican senators, including Norm Coleman, of Minnesota, said Wednesday they intended to do.
Inland workers said they rely on tips to supplement their wages.
Amanda Testa, 18, of Riverside, said she works at Sizzler for minimum wage and couldn't make car payments or pay for food and clothing without help from tips.
"The checks are nothing compared to my tips," she said.
Jennifer Paris, 17, also of Riverside, said she earns minimum wage at a sushi bar and takes home from $20 to $25 a night in tips.
"They add up," she said. "That's why people work in restaurants. Just for the tips."
California labor groups said they would fight the federal bill.
"States should have the power to set wage and hour law for workers in their state," said Angie Wei, legislative director for the California Labor Federation, which represents more than 2 million union members in the state. "It's ironic that this Congress would want to strip states' rights."
Minimum-Wage bill in house
How they voted:
FOR Bill Reps. Mary Bono, R-Palm Springs; Ken Calvert, R-Corona; David Dreier, R-San Dimas; Darrell Issa, R-Vista, and Jerry Lewis, R-Redlands.
Did not vote Rep. Joe Baca, D-Rialto, the region's sole Democrat in Congress, did not vote -- he underwent cardiac catheterization Friday.
If you prefer the tips, then allow workers should be allowed to opt out.
These people want it both ways.
Tips. Another reason I rarely go out to eat.
I was in Ireland and it was nice to not tip. I felt really guilty about it until I inquired as to how much the wait staff and bartenders got paid. They must have been subsidized by the government.
Car payment? Get you a good used one - save up, pay cash. Clothes? Do you need the latests designer outfits? Food? How 'bout weenies and macaroni w/cheese?
All ways that I, as a TEENAGER supported myself as a waitress. Did'nt hurt me - youth is about learning to control finances, learning you cant have everything you want all the time, that what is best, is worth working for!
Minimum wage hikes hurt entry level workers and provide no incentive to better yourself. Just my opinion.
Tax breaks for teachers, why do they deserve a tax break, what makes them so special compared to a working stiff the spends 4 0r 5 yrs learning his trade.
Tax breaks for teachers, why do they deserve a tax break, what makes them so special compared to a working stiff that spends 4 0r 5 yrs learning his trade.
Tips are not a wage, they are a gift. Gifts under $10,000 are not taxable are they??
Another stupid government trick.
I'd like to know that myself.
Most teachers already get a break. With a minimum $30,000 per year for approximately 7 months of work (summer break, spring break, Christmas break, personal vacation, personal time..etc.). In addition, they are not actually teaching anymore..just babysitting and handing out passing grades.
My apologies to the few truly dedicated and good teachers..I know you are out there...
(soapbox) Also, teachers here work 183 days a year. About 75 days less than the rest of the working world.
And demand that wages *start* at 36,342/yr plus insurance, etc. About $25/hr plus benefits or equal to $18/hr if annualized - and that is not enough. See http://www.asdk12.org/depts/hr/employment/salary.asp for more.(/soapbox)
Very true. But the DOE needs to keep their anti-American constituents happy so they will vote democrat and brainwash children properly.
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