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Tipped Minimum Wages for Restaurant Workers May Increase in Several States

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This is great news for servers and bartenders.

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Along with raising the minimum wage, a growing number of states are looking into increasing their tipped minimum wages, too. Currently, those who work in positions that earn tips are paid an hourly rate that is typically lower than the state or federal minimum wage. The pressure to raise wages is coming in part from statistics that show that those who earn tips are living in poverty. According to a press release from the Restaurant Opportunity Center, tipped restaurant workers — such as servers — use food stamps at "double the rate of the rest of the US workforce" and are "three-times as likely to live in poverty."

To help combat this, seven states — including New York — have already increased or eliminated the lower tipped minimum wage and seven more are in the process of increasing or eliminating it altogether. States like Michigan, Connecticut, New Hampshire, and Maryland are "likely" to introduce a bill to increase tipped minimum wages to match the regular minimum wage. New Hampshire is even considering raising the tipped minimum wage — which is currently $3.27 — to match a proposed new general minimum wage of $14.50 per hour.

Other states like Rhode Island, Massachusetts, and Connecticut are tackling the issue with a different method: Instead of raising tipped minimum wage to match the regular version in one fell swoop, the states are introducing bills that would increase the former on "a yearly basis" until it reaches the general level.

Restaurant owners could be required to pay tipped staff 50 percent of the general minimum wage.

WICU notes that House Democrats in Pennsylvania are also pushing for a a higher minimum wage, both tipped and general. If the new legislation passes, the hourly wage would be raised to $9 per hour and would climb to $10.10 after one year. Then, starting in 2017, the minimum wage rate would be determined by the "cost of living" each year. This bill would also drastically raise the tipped minimum wage: Restaurant owners would be required to pay tipped staff 50 percent of the general minimum wage.

Some lawmakers in Pennsylvania are so enthusiastic about raising the minimum wage that they are thinking of ways to incentivize businesses who adhere to the new rules. The Pittsburgh Post-Gazette writes that a Pittsburgh councilman is introducing legislation to create a program that would reward restaurants that raise their minimum wage. For example, businesses with between 15 and 250 employees that increase the hourly salary of their employees to $10.10 per hour — $3.93 for tipped workers — will receive free advertising space on the city's bus shelters.

The restaurant industry has long had a reputation of paying its employees dismal wages, but perhaps the tides are starting to change. According to a new report from the Wall Street Journal, restaurant employees "received bigger raises last year than workers in most other jobs." This is due in part to the trend of many states increasing their minimum wage levels even though the federal minimum wage has remained at $7.25 for the past six years. Perhaps the federal government will reconsider its wage levels if states continue to raise their minimum wages across the country, hopefully to a point where fast food workers no longer have to strike for a livable wage.

Not everyone is happy about the increase in tipped minimum wages, however: Some are quick to note that back of house employees — cooks, dishwashers, and chefs — are generally not tipped. An increase in the tipped minimum wage then further divides the salaries of front and back of house employees, and usually means that tipped front of house staff will make much more than their co-workers in the kitchen. It's a hot topic for chefs across the country: Alimento in LA recently added a tip line on receipts for their kitchen staff.

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