My recent article in the Q3 2014 edition Foodservice Consultant magazine, “The $15 Minimum Wage Debate,” certainly was prescient. I described how the political pressures of the progressive agenda would (and have) gone too far, and that something significant had to break. Well, it did—in part, at least.
The California Restaurant Association, for which I was honoured to serve as chairman almost 20 years ago, issued a blockbuster press release on February 26, 2015, announcing its sponsorship of an amendment to AB669, a “total taxable compensation” bill.
In simple terms, this reestablishes the principle of the “tip credit” using a $9.00-per-hour recalculation baseline. If passed, “qualifying tipped employees” must earn at least $15 per hour when tips and the state minimum wage are combined or the employer is required to increase the wage to fulfill that threshold. (A “qualifying tipped employee” is one who regularly receives remuneration from both tips and wages at a rate equal to at least $15 per hour.)
Of course, given the huge earnings of many tipped employees, often as much as $20-$30 per hour in California cities, AB669 is nothing more than a step to freeze the wage disparity between front of the house (service) and back of the house (kitchen) employees. It is ironic that wage fairness, the siren song of the progressives, became the underlying force that may allow this legislation to be successful.
Even though back of the house (or heart of the house) employees are almost universally paid considerably above minimum wage, they would now benefit from more evenly balanced hourly wages made possible by the pool of dollar savings created by limiting the front of the house minimum wage indexing.
A tip of the hat to Jot Condie, CEO of the California Restaurant Association. Let’s hope the other non-tip credit states are watching.
Tucker W. “Bill” Main, FCSI, CSP is a Co-Founder at FLUENT Strategic Advisors