Measure Would Cap Minimum Wage For Tipped Workers At $8 Per Hour
Minnesota’s
Republican-led House of Representatives on Monday approved legislation to
revise the state’s minimum wage law to create a lower minimum wage for tipped
workers. Under the measure, which was crafted by the Minnesota Restaurant
Association and introduced by Rep. Pat Garofalo (R), pay for tipped employees
would be required to meet a minimum of $8 per hour, provided those employees
earned a total of at least $12 per hour in a two-week period after factoring in
tips. Tipped employees who failed to meet that income threshold would earn the
prevailing state minimum wage plus their tips.
What Happens Next.
The measure now goes to the state Senate, where
leaders of the DFL majority have voiced their strong opposition and passage is
unlikely. Gov. Mark Dayton (D) called last year’s minimum wage legislation “one
of the best things that Minnesota has done. It puts money in the pockets of
those consumers all over the state.” Dayton also stated his opposition to an
exemption for tipped workers, saying Monday, “I can’t imagine signing a tip
credit bill.”
What This Means For Small Business:
While the Federal government and
most states allow employers to factor tips into minimum-wage calculations,
Minnesota does not. Under a law passed by the DFL-controlled legislature last
year, Minnesota’s minimum wage is set to rise to $9 per hour in August, then
another 50 cents per hour in 2016, and will be indexed to inflation starting in
2018.
Restaurant operators have said their labor costs have grown since August, when
the state’s minimum wage increased to $8 per hour, and they say the next stages
of the phased-in increases will negatively impact their already narrow profit
margins. According to the Minnesota Restaurant Association, without the
legislation, full-service restaurants may have to switch to fast-casual or
quick-serve formats, or implement automated ordering options, such as tablet
computers, in order to reduce labor costs.
Additional Reading:
Among other media outlets, the Minneapolis Star Tribune, the St. Paul (MN) Pioneer Press, the AP, and the website of KARE-TV report on the legislation.
