Last week, NFIB submitted testimony to the Joint Committee on Initiative Petitions opposing the proposal to phase out the tipped wage in Massachusetts. Out-of-state activist groups are in the process of placing a question on the 2024 state ballot to gradually eliminate the tipped wage for the state’s restaurants. The committee heard testimony from restaurant owners and their workers urging lawmakers to reject this legislation.

Already one of the hardest hit industries by the pandemic, restaurants would now be forced to:

• Raise the tipped wag to 64% of the state minimum wage by 1/1/25
• To 73% by 1/1/26
• To 82% by 1/1/27
• To 91% by 1/1/28
• And to 100% of the state minimum wage by 1/1/29
• It also calls for tip pooling.

States that attempted to phase out the tipped wage experienced an increase in menu prices while servers saw a reduction in their tips. Maine had to reverse their tipped wage phase out through legislative action at the request of servers facing smaller paychecks.

It’s also worth noting that proponents falsely paint a picture of a “sub minimum wage” in restaurants. It is unlawful for employers to pay less than the Massachusetts $15 minimum wage. If a server averages less than $15 per hour with tips included, the restaurant owner is required to pay the difference. In fact, Massachusetts modified this requirement to make it more stringent under the 2018 Grand Bargain mandating the “true-up” be calculated based on a worker’s shift, not pay period.

NFIB opposes the phase out of the tipped wage in Massachusetts and feels it will have a devastating effect on the state’s hospitality industry.