Fuzzy Math: Restaurant Tip Bill Moves Ahead

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(Photo: iStockphoto/Thinkstock)

A bill that would allow restaurant owners to change the way they pay servers, bartenders and busboys by doubling their minimum wage passed a Senate committee on Thursday with union representatives and some committee members scratching their heads and complaining of fuzzy math.

(Photo: iStockphoto/Thinkstock)

Citing the fact that restaurants are closing at an alarming rate around the state, Sen. Nancy Detert, R-Venice, introduced a bill, SB 2106, which takes a novel approach to saving restaurants: Increase the guaranteed minimum wage for tipped employees from $4.65 to $10 an hour.

The reason: most tipped servers actually make a fair amount more than the minimum wage when their tips are factored in. For them, restaurants could pay less. For those who make less than the minimum, it would mean a raise.

The Florida Restaurant and Lodging Association has backed the measure, which would give employers the option of paying their tipped employees 130 percent of the state minimum wage for non-tipped employees, now $7.67.

By guaranteeing to pay 130 percent of minimum wage, which would be $10 an hour, employers in some cases would be able to reduce the amount they pay – because many servers pull in more than that. In cases in which their employees earned less than $10 including tips, they would be on the hook to make up the difference.

Acknowledging that it is an unusual approach, Detert, chairwoman of the Senate Commerce and Tourism Committee, said a rash of restaurant closures around the state over the past several years requires some outside the box thinking.

“This is a thorny issue, it calls for a little bit of bravery,” Detert said. “As politicians, this is not in our best interest to do something that looks like we’re hurting employees. What we are trying to do is build a thriving business climate.”

Red Elephant owner John Shrowang testified his tipped employees typically make $15 to $16 an hour, when those tips are factored in. With Florida’s minimum wage much higher than nearby Alabama, Shrowang said his company is shifting gears. After opening eight restaurants in Florida, the company is expanding in Dothan, Ala instead.

Citing federal statistics, union representatives said the median salary for a tipped employee is just under $9 an hour. Many tipped employees, therefore, will see their take home pay reduced – which is the point, because it will save restaurant owners money.

Rich Templin, representing the AFL/CIO, said that a waitress who makes $14 an hour would see her pay cut by more than $2.50 an hour under the bill.

“When we hear that this proposal could guarantee 130 percent of the minimum wage and that excites us a little bit… but what we have found, at the end of the day, you were still looking at a $2.52 cent reduction in their base rate,” Templin said.

Detert’s bill passed the committee on a 5-1 vote, but even those who supported the bill Thursday said they won’t guarantee the same support as the bill moves forward.

“I’d like to see restaurants stay in business so more people can be hired,” said Paula Dockery. R-Lakeland. “But I have heard from a lot of tipped employees that have expressed opposition to this.”
By Michael Peltier

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