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Making $2.13 an Hour and the Boss Skims Tips? How We Can Fight Exploitation in Restaurants

Tipping catches workers between customer whims and employer exploitation. But some states and businesses are changing their ways.

Photo Credit: Brian A Jackson/ Shutterstock


Two weeks ago, a story about a wealthy California business executive leaving a 1 percent tip on a $133 lunch bill went viral on the Internet. Supposedly, the banker wrote "Get a real job" on the receipt as a smarmy reinforcement of his own status as a member of the 1 percent and as a put-down of the Occupy movement.

The restaurant in question quickly provided evidence that the damning receipt was Photoshopped. But it spread like wildfire because a rich businessman treating a waiter like garbage sounded true to many people. In recent months, the poor treatment of restaurant labor has received increased media attention. People inundate comment sections on blog posts and news stories about restaurants, sharing their own horror stories.

Restaurant labor is classified differently than any other form of work in the United States. Unlike most jobs, where a base wage provides the majority of one's income, federal law allows restaurants to pay as little as $2.13 an hour to waiters, forcing workers to hustle to supplement their meager wages. Regulations do require restaurants to match the minimum wage if the tips do not cover it. But owners often ignore the law as many workers either do not know the law or have no idea how to enforce it.

Tipping catches workers between customer whims and employer exploitation. Tipping standards vary widely depending on the clientele; how many times have we eaten at restaurants and debated how much to leave as a tip? Mom wants to leave 10 percent, you argue for 20 percent. Some waitstaff do very well with tips. Workers at higher-end restaurants can bring home hundreds of dollars an evening in cash. The tipping system also has benefits for undocumented labor. Often unable to open a bank account because they lack a Social Security number, undocumented workers in restaurants will not even cash their minuscule checks and rely on tips for survival.

But the tipped minimum wage exploits many restaurant workers. Florida lawmakers recently defeated a bill proposed by the Florida Restaurant and Lodging Association that would have reduced waitstaff's hourly wages from the Florida minimum of $4.65 an hour to the federal minimum. Moreover, management at high- and low-end establishments often takes money out of workers' pockets by skimming from the tips. A 2008 court case forced Starbucks to repay $105 million to workers forced to pass their tips up the corporate chain. New York celebrity chef Mario Batali just agreed to pay $5.25 million to workers at his restaurants after they sued, claiming that management took millions in tips from their pockets over the years.

Some states are moving toward better protection for restaurant and other service labor. Rhode Island state legislator Christopher Blazejewski has introduced a bill that would ban restaurants, hotels and other establishments from requiring workers to share automatic gratuities with management. Customers believe these fees are going to workers in lieu of tips; the bill would force restaurants to delineate precisely where the service fees go so that workers can have the opportunity to earn an appropriate tip.

Workers themselves are also fighting for their rights. Restaurants Opportunity Centers United is a nonprofit worker center organizing restaurant labor with locals in eight American cities. ROC organizes around a large number of issues, including sexism and racism within the restaurant industry, acquiring paid sick days for workers, and raising the tipped minimum wage.

Meghana Reddy of ROC-United explained to me that the organization originated to represent the surviving workers of Windows on the World, the restaurant at the top of the World Trade Center, where 80 workers lost their lives during the September 11, 2001 attacks. These mostly immigrant workers needed help navigating the federal aid bureaucracy. Building off this experience, ROC began advocating for restaurant workers' rights, particularly over the tipped minimum wage. After a decade, workers have achieved important gains. ROC-Philadelphia recently successfully lobbied for a city ordinance to stop employers from taking credit card fees out of tips. At present, ROC-United is lobbying for the WAGES Act, a bill sponsored by Rep. Donna Edwards (D-MD) that would raise the tipped minimum wage to $5.50 an hour. It is also protesting the Darden Restaurant Group, a corporation that owns popular chain restaurants such as Capital Grille, Olive Garden and Red Lobster for taking tips from workers and making tipped workers do untipped labor at the tipped minimum wage.

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