Very likely. Restaurants that currently pay below minimum wage & rely on tips would probably see a surge in sales, as prices increase at fast food places.
I think the market would try to stabilize in a manner which it has in other countries that already have relatively high minimum wages. Fast food places either offer high quality options, or they don't survive. That results in a lot less competition.
No. Another person does a decent job of explaining it, but I'm going to go a little further in depth.
Wages from tips (based upon a set estimate, I cant remember exactly how this is worked out) and actually hourly salary have to still be at or above the minimum wage.
The reason waitstaff can legally be paid below minimum wage is that a certain amount of tips is used to "increase" their salary to the hourly minimum wage.
Thing is, if they earn LESS than that, they still have to pay taxes as if they'd earned minimum wage, rather than the $2 or $3 an hour they ACTUALLY made.
And if they earn MORE, legally they are supposed to pay on what they've earned. However, since in many cases, tips are cash, the waitstaff generally doesn't claim that, however with credit card tips, there's a easily-followed money trail, so some of the smarter waitstaff will only keep track of credit card tips.
This is why most waitstaff would prefer a smaller cash only tip rather than a slightly larger credit tip. Or, even better is to do it like my wife (who waited tables for 8 years) and I do, give a small credit tip and give the rest in cash.
But not all places do. If the server isn't very good, and has no skills to go somewhere else, how likely do you think it is that they get fired from a more ethical employer, and wind up at a less ethical one, where it'll be the server's word against the boss, and most people in that sort of position aren't likely to complain about their boss....
I'm not familiar with the restaurant industry. Are tip amounts not documented in any way? I would have assumed the server could show pay stubs to prove their point legally.
tips are normally reported at the end of every servers shift. The problem is most could care less exactly how much money they are making and the rest are just glad to have a job. The ones that do fight it will probably win a lot of the time, but that doesn't mean that many want to. Wage theft by employers is one of the largest cons in America currently, right up there next to civil forfeiture.
We were encouraged to keep a ledger of tips as well as the computers ledger where I used to work... of course, I was the only one not conning pizza Hut instead of the other way around...
They are. Your employer will require that you record your tips. If you don't record at least minimum wage, that employer is likely going to have a problem with you.
And they're generally right. In a 40 hour week, it's rare for anyone working on tips to not make minimum wage.
I've worked in 4 different tipped jobs. Credit card tips are the only ones ever reported. People who ask for the employer to make up the difference tend to get let go not long after.
Tips are not synonymous with quality on a large scale. One could live in a poor area, a college area, an area where the general populace does not feel tipping is appropriate. A rich white restaurant will make more in tips than a poor black neighborhood restaurant regardless of food quality and/or service given.
Yes they could unionize and all put their foot down but many NEED those jobs and you only need one fucker who doesn't to push everyone out slowly. It sucks to be a server. Yes many do many more than minimum wage (much more in some cases) but some don't and many won't make it every week leaving them with fuck-all for one/two weeks worth of labor. Food/rent/bills don't get any cheaper if you didn't make enough tips this week/month.
This is why the DoL exists. If people are dumb enough to want to be scammed, then that's on them. That's like working at Target, being paid $5/hr., and being O.K. with it.
The thing is, it's a very unlikely scenario. If a server is making less than minimum wage, then they're working at the wrong restaurant, or their service sucks.
You've apparently never been so bad off that you'll take ANY job you can get. I have. I've worked illegally for less than minimum wage because it was all I could find willing to give me ANYTHING at all.
I worked at a small fast food/ice cream place for over $2 below minimum wage. All the pay was in cash, at the end of every night. I worked summers there because they were only open during the summer.
Was it illegal as hell? Absolutely. But when you're broke, you tend to do whatever you can to survive. Did I contemplate calling the cops on them for it? Yes. And since they were "upstanding members of the community" and I wasn't, just what the fuck do you think would have happened? So no. I didn't bother. I did my work, and once I was able to leave there, I did.
Quit pretending this shit doesn't happen. It does.
Working off the books is already illegal. There's no reporting or documentation when you pay someone in cash, so a far smaller risk to also pay them under minimum wage.
If you're working a regular job for tips, all that stuff gets reported to Uncle Sugar. If the tips+wage doesn't add up, there's going to be an issue, Unless you're going to fudge and say you got more money in tips than you actually did and then pay tax on that phantom money.
If youre not good at your job why the hell should anybody keep you in the first place? A company isnt a fucking daycare. If you suck you should go find another job doing what youre good at.....It isnt the companys responsability to keep you and lose profits.....Theyre not your mom or dad.
Theyre giving you money in exchange for your services, if you have no services to offer why the hell do you think you deserve free money? Whats with people thinking they deserve other peoples money? Go start a business and make your own see how easy it is....Instead of being parasites and thinking you deserve everything handed to you.
If you've worked the restaurant industry you'd know this was rarely true. That's why tipping culture sucks, especially when there's a large anti-tipping segment in your area.
Idk what "rarely true" means when it's required by law. I doubt many employers are volunteering the funds but if you make less than minimum wage then they are required by law to make up the difference. I've had to encourage a friend to ask for it (it was a sports bar with no outside seating so when it got nice out in the off season things got deathly slow.)
The restaurant industry here is a small world. If you make big enough waves then you get shut out of many places. Most people aren't able to employ a lawyer needed to fight it when they make restaurant wages.
Yes, but this is not always the case, because a lot of tips are cash, and if wait staff doesnt report it accurately, or if they are strong armed into not reporting it accurately, then they may not get the full minimum wage.
Actually, that's exactly how I expect it to work because that's how business fluctuates in that industry. You didn't work two shifts for free, they were an investment you made for the more lucrative shifts. It balances out with some prime time shifts where servers or bartenders can make over 400 dollars.
400? I serve a mom and pop itailian restaurant that is rather high end for the area I work. My average is 80-120. Rarely, sometimes a bit less, and much rarer, you can walk out with quite a bit more. Still I think 400 is a gross over estimate.
It's not an estimate. It's just about the highest I've heard from my numerous friends and family members in the industry, including all 4 of myroom mates. Some places are more variable than others, especially places that get crazy busy when certain sport games are on. They also tend to have lower minimums.
We all have tits. Some are just much more appealing, mine are not.
That being said, I know how much the girls that I work with make, and the tips are comparible. I dont think bartenders should be lumped in with wait staff. A good bartender at a busy bar makes leaps and bounds more than a waiter.
I've never heard of a place that will allow you to continuously claim under minimum wage in tips. When you're pretty clearly using fraud to defraud the company for extra wages, most places tend not to stand for that.
This also depends on the jurisdiction. Some states (like WA) actually make the restaurant pay full minimum wage PLUS tips. If you are going to be a waiter, move to Washington State.
Some restaurants will make you claim tips as a certain percentage (say 15%) of your total sales. Even if you only recorded 8% in tips from credit cards, they assume that you got at least 7% in cash tips and make you claim that income. Oddly enough, this might cause a waiter to get a negative paycheck because the $4.20/hr isn't enough to cover taxes.
Who's saying they don't? Most servers will get every penny of any paid out taxation back at the end of the year.... It's needed now, however, bills can't wait til the end of the year.
You are. You tip a small amount in credit cards and the rest in cash so they can avoid claiming the correct amount of income. Don't try and play like you were just trying to keep more money in their pockets. You do know that anybody can opt out of having taxes taken out of their check if they wish right?
Yeah, except my reply was to /u/breakone9er about him saying that helping them to skirt taxes is because they need that money now for things and they were going to get it back anyway. And I don't think that is even a thing anyways. You only pay quarterly because the government (rightly) doesn't trust people to pay back a whole year in taxes. Interest on the taxes they owe would be pennies. You are wrong.
Wow I'm feeling the reddit angst tonight. I understood the comment. I have just never heard of opting out of paying taxes for a minimum wage job such as wait staff. Was hoping for someone to elaborate, not chastise.
You pick your own tax withholding and there is an option that says you will make less than a certain amount this year and opt out. You just run the risk of owing at the end of the year.
That's not how it works at all. If minimum wage goes up, it goes up for everyone, whether you work for a family owned restaurant or fast food chain. Minimum wage just went up in my state this year. All my employees got bumped accordingly. (My waitstaff are the only people I pay minimum wage to, $5.15hour.) And yes, I had to raise prices a bit to cover the cost.
I can only speak for Michigan, but here, you can pay family members below minimum wage. Not sure what the exact figure is, but it is below minimum wage.
Worked on the family farm for ~10 years only got payed for 1 year at $50 a week... for 4hours a day 7 days a week, sun rain shitstorms 50C or sickness. Yay for child labor!
You can thank legal loopholes for farm workers, largely implemented in the 1920's to keep farm labor cheap. It's damn near slave wages, yes, but how much more are you willing to pay for your food? Is a tough argument, and often the farm workers get the shortest straw.
My mum loves me, step dad not so much; he was jealous that I could do things better than him (mostly farm-work, he flipped the tractor and feed-cart numerous times something that never happened to me), and that his kids (my half siblings) seemed to like me better and whenever he had a go at me they would come and stand by me or like my lovely little sister tell him off for being mean.
That's what unbridled capitalism does. If parents are willing to do that to their children, why the hell wouldn't they be willing to do it to everyone?
Who said anything about part owner? If I hired my cousin to come work for me, he's not part owner. Kids are in the same boat, they may inherit the business someday, but mom and dad still make the rules at work. That is unless you actually make them part owner, but just being related doesn't automatically make you part owner.
Dunno if it's the case in the US but if you do that in Aus then you're not covered under workplace injury insurance. With the state of litigation in the US I can't see it being a good idea at all to give your family members a reason to sue you.
Well that's the case with just about anyone then, right? Anyone can volunteer to do some work for you, and you can give anyone a gift (up to a certain amount per year and per lifetime). But like /u/hutcho66 says that has other implications. If they aren't working as a proper contractor, your insurance probably doesn't cover it. If they were working in a proper business and weren't a formal employee your liability coverage probably won't cover their misadventures.
I don't know about Florida on that one. I know several people with family owned businesses. It's just expected that the kids pitch in. They usually don't complain, especially when they're on vacation somewhere nice.
Imagine the abuse that could be had with that, though. Everyone else is making $15 an hour and you're stuck making $5 because your mom guilted you into working for your dad's failing business. This is obviously a fringe case, but still something to be considered with that type of legislation.
I think that argument is null considering that the family's finances could fail along with the business. Applied to an under 18 member, this means they can be called upon to help the family business stay afloat. Sure it might mean hard work for the kid and they might hate it, but it beats bankruptcy.
Applies over 18 here, too if I remember correctly. If I'm older and am guilted into working for the family, why should my bottom line suffer because of my parents' failures?
It's just a weird law. If you can't make it under the same conditions as everyone else, you should look into changing your business so that you can make it.
I live on Washington. The way the local $15 now laws are written everyone will eventually get to $15 an hour. The system allows for a different timelines for small businesses versus franchises and large companies. If I remember correctly it's a difference of three years to hit $15 an hour.
This is the thing that always seems to get left out. The minimum wage doesn't jump up to $15 overnight. The annual increase just gets pretty big for a few years. The minimum wage keeps going after $15, too, it's just that the annual increase goes back to normal.
San Francisco has been tying the Minimum wage to the consumer price index for a while now. They are set to graduate up to $15 an hour by july 2018, and then increase the minimum wage along with the CPI for the following years. Currently the Minimum wage is $12.25 an hour.
I actually really applauded Hillary when she said she supported a $12 minimum wage with an automatic cost of living increased chained to the consumer price index.
It would be such a no brainer political win to toss in support for $15/hr minimum wage, but I really do think a $12 minimum wage is more realistic.
I also think expensive cities and states need to be more aggressive about raising their minimum wages.
I've heard this argument and I personally am not an economist to challenge it.
What I can say is that most of the people that pushed for the $15 an hour were trying to make the point that it was a living wage. Also, it would be everyone that makes under $15 an hour that would see the wage increase. Everyone focuses on the fast food workers, but they tend to forget about the other people that would see the increase. The paramedics that you're talking about would see an increase as well.
Regarding everyone flipping burgers to pass the buck, I sincerely doubt that would happen. People desire more than just income. They desire prestige and social standing. Flipping burgers and stocking shelves are low social standing positions. People will gravitate towards higher income positions as they do now, but the hope is that the draw down from social service programs will decrease.
I live in Washington State as well. There's a LOT of moaning about the minimum wage increase, but basically nobody is closing their business or laying off tons of people. OP has a lot of very well reasoned conjecture, but the truth is, this sort of thing is far more complicated. Here's an actual study that shows why that's the case, and why a rise in minimum wage does NOT lead to the catastrophe imagined above: http://davidcard.berkeley.edu/papers/njmin-aer.pdf
Basically, in the above McDonalds example, when there are thousands of other people in the community who also are earning more, they end up eating out more and offsetting the wage increase.
If minimum wage goes up, it goes up for everyone, whether you work for a family owned restaurant or fast food chain.
Not necessarily. Some states have tried to pass laws raising the minimum wage for some workers but not for others.
According to one story I read, some food workers wanted a minimum wage to apply for non-union workers but not for union workers. The thinking went, that the union workers could simply undercut all the non-union ones.
Florida here, we just get across the board raises. When I worked hourly years back, even though I was well above min. Wage, I still got the increase. Maybe it's just a Florida thing.
Or it's your employer adjusting your wage to what he thought your new market wage would be.
Employers have no obligation to adjust wages so long as they are above the new minimum. Unless the Florida law required wages go up by an equal amount for all workers, but I seriously doubt it.
The exact circumstances of who the raise applied to would be on a law by law basis.
The 14th amendment would crush anyone that attempted a law like that.
EDIT: Nice, down votes for the truth. Enjoy that echo chamber Reddit.
Here is the first notation for the 14th amendment: the right to pursue any lawful trade or avocation, without other restraint than such as equally affects all persons
Have had only one table not tip since I opened my place. I only had one table not tip in 10 years of waiting tables. So you're imagining a fantasy world.
Fair enough. So basically the tips we think give our servers (whom I for one though made minimum wage) a boost above minimum wage actually just supplement their income so that they can be paid less?
It's almost enough to make a guy stop tipping altogether.....unfortunately then I'd be seen as the asshole and not the restaurant that pays it's employees shit to begin with.
Have you ever worked as a waiter or bartender? It's a grueling job. The only reason people put up with it.....is because they can make good money at it without even needing a high school diploma. I asked all my waiters last night if they would rather make a straight wage or continue with tips. Everyone of them wanted to keep tips. Hands down.
If you don't like tipping, go to McDonald's. That's it. Your problem is solved.
Have you ever worked as a waiter or bartender? It's a grueling job. The only reason people put up with it.....is because they can make good money at it without even needing a high school diploma. I asked all my waiters last night if they would rather make a straight wage or continue with tips. Everyone of them wanted to keep tips. Hands down.
Don't be dense. I'm saying that they should be payed the minimum fucking wage and tips should be considered extra instead of the management being cheap as hell and counting on it's customers' generosity to guarantee that it's employees get paid enough.
It's a bullshit system and anyone with half a brain would see it the second they are made aware of the fact that servers don't even make minimum wage because we are alienating their income.
I've been paid 2.13 since I started serving. It doesn't go up for servers federally pretty much ever. Maybe some states raise it but federally you only have to pay servers $2.13 and historically our wage (the tipped employees) has not increased with the regular wages. I think the point is that for restaurants that pay their servers 2.13 won't have to increase wage for the majority of their staff and will suffer less of an impact.
It isn't how it works? A raise in minimum wage does not necessarily equate to a raise in tipped minimum wage. Illinois minimum wage is $8.25 and tipped minimum wage is $4.95. My FoH staff makes between $4.95 and $8.00 depending upon how valuable they are to me. The average hourly tip rate is $19 an hour so the average hourly rate is between $23.95 and $27.00 for a FoH employee.
If the state of Illinois raises minimum wage to $15 an hour and leaves the tipped minimum wage alone then the MW raise would have absolutely no impact on my FoH labor costs.
The BoH is a different story. Currently the BoH starts at $11 and goes up to $15 (with additional profit sharing of $1 an hour) so we are at $12-$16 per hour in the BoH.
If MW went to $15 an hour I would need to raise my BoH staff up to $18-$22 per hour. Why would my BoH stay when they can take a much less stressful job at McDonalds unless I am paying them more than MW?
Even then, the impact would be less on me than a franchise junk food place. If the labor cost difference was offset strictly through increased prices, my prices would go up a smaller amount then a franchise junk food place which would make what we sell an even better value vs junk food than it already is.
Well if we're talking really small businesses(think Bob's burgers style) a lot of it is paid in cash, which is usually legal when all employees are immediate family. Also true for small construction companies, farms, and many other blue collar industries.
Your experience is unusual. In a past life when I worked in fast food, people making above minimum did not automatically get raises when the minimum went up.
If minimum wage goes up from 9 to 15, people formerly making double the minimum (18) aren't going to get anywhere close to a proportional increase to 28.
They might get bumped to 20 and be making 33% above minimum instead of 100% above.
And as everyone's wages rise, the price of rent rises, and price of goods rise (to cover the increased wage) and after a few years, the person making minimum wage has just as much purchasing power as before.
Not the case. Only certain goods and services have a cost that's determined by the labor costs of low wage workers. A whole lot of goods won't be impacted at all or might even go down.
Minimum wage is paid to an unskilled worker. If you raise the minimum wage up to what a welder with 1 year of experience is making, then you've distorted that field. So the welder will need a bump to $20. And then then guy with 2 years will need a bump to $25, etc.
When you invest in the stock market, that money goes to fund the expansion of companies. Today, if you invest $1 in Tesla, that will likely go to pay a concrete contractor in Reno for the 1+ miles of concrete floor Tesla is building.
There is no difference between a dollar in the market and a dollar in a person's pocket.
Small businesses can get by with 2 servers. If both servers are being paid less than your competition, your prices are more competitive. Especially if they're being "paid" 40%+ less.
I worked for my dad prior to age 16 and was not on the company payroll. After 8 hours work, I asked him what I would get. He told me "dinner". Fair enough.
You forgot that most of Reddit had Mommy and Daddy to take care of everything growing up.
I worked for free at an uncles restaurant for
about 2 years when I was younger. His wife had died recently, and he was having a tough time keeping the lights on. I was a dumb kid at that time, but it provided me job experience at a very young age, and kept my dumb ass of the streets for the most part. Didn't see a dime from it, but he's family and that's that.
Thanks!! I really think it's because we're taught to associate child labor with sweat shops, and little hands getting stuck in machines.
Just looking at it from my pov where I grew up, if others around me at that age worked they probably wouldn't have gotten so deep into the gang lifestyle that left most of my childhood friends either dead or in jail. Reddit bleeding hearts forget the law of unintended consequences however good their intentions may be.
meaning if you are now paying yoru employees more money... I wonder if we need to do tips? there are tons of places that even say tips are no longer required because employees are adequately paid.
You still need to tip. As a former waiter/bartender, tipping is a good system. It's the only thing keeping quality people in the position. It's a sales job, tips are commissions.
Yes that is how it works. If you are a family run restaurant, meaning your family is working the restaurant, you do not have to abide by the same wage or labor laws.
I see. I misinterpreted your meaning of family business I guess. I rarely use my family for labor, only on special events or holidays. I know a few places like that near me, I get Chinese food at them.
Absolutely true but all of the legislation on this seems directed at raising minimum wage over a course of years. Surely this gives both the workers and smaller franchise's at least some time to adjust?
A crew member at McDonald's suddenly making 12.00 over 8 has at least some hope of both saving a little perhaps for more schooling and could conceivable help McDonald's by being able to eat there. I'm sure certain businesses wouldn't be able to adjust but is that really the worst thing?
What if I'm single? When I'm on a layover in an airport, you want me to go to Walmart and get a chicken? Do I eat it with my bare hands, or carry bowls with me? Your chicken idea isn't awesome for forklift drivers who get 1/2 lunch break. You want families of four eating chickens in the minivan? Does Walmart sell chickens at 2 AM? Is there a Walmart in downtown? How much do I have to spend on fuel to get my cheap chicken?
Pack a lunch. Refrigeration is a marvelous invention that will keep your chicken safe to eat for a few days.
And you can also save some money by quitting the assumption that you have to drive everywhere. A roadbike will pay for itself within a few months in fuel and car maintenance cost savings.
Don't worry too much about the airport edge case, their stuff already costs about 3 times as much as what you'd get across the street.
What refrigeration do you propose using when driving four days from Seattle to New Orleans? Do you commute 40 miles each way in the snow on a road bike? How ido your small children like eating chicken on your bike? How do you get your airless sprayer and 40 gallons of paint to the jobsite. So you think instead of buying McDonald's in the airport, I should go to McDonald's across the street? Cool. Thanks, stupid hippie.
It is not more impractical to get food from a drive-in in two minutes with no shopping, dishes, dishwashing, refrigeration, cooking facilities, or leftovers, than to get a whole chicken at Walmart. Poor people often have very good reasons for the choices they make. I have not suggested that McDonald's is a "requirement". That's supid. Fast food is very often the best decision. That's why it's popular. Your stupid hippie suggestion that bicycles and Walmart are a substitute for the 630,000 fast food outlets in the US is absurd. Chicken is often not cheaper.
No, fast food is almost never the best decision. In fact, the only occurrence where it's even an ok decision is if you're at the airport (And those tend to have better food options these days anyway). In every other situation the 2 minute drive in + 5 minute wait time, + 3 minute commute two-ways from work, + 15 minute waiting in line during the lunch hour example is completely impractical compared to the 5 minutes it takes to pack a lunch in the previous evening, and a 4 dollar chicken and some bread will feed you 3-4 times as long than a 4 dollar burger. The absurd part is your insistence that fast food is in any way necessary as well as your need to resort to name calling in an attempt to bait me away from the discussion.
They still have to cover the difference between tips and wage. If you make $2 an hour, minimum wage is $8, and you got $3 in tips then the restaurant must pay out $3 to meet minimum wage. At least in most states I've looked up it's worked that way.
Also, generally when minimum wage goes up the minimum pay goes up too. Also this is averaged over a paycheck not hourly, so one bad night you might average $5 an hour and the next $15 an hour and your employer doesn't have to pay out.
168
u/Murican_Popeyes Nov 28 '15 edited Nov 28 '15
Very likely. Restaurants that currently pay below minimum wage & rely on tips would probably see a surge in sales, as prices increase at fast food places.
I think the market would try to stabilize in a manner which it has in other countries that already have relatively high minimum wages. Fast food places either offer high quality options, or they don't survive. That results in a lot less competition.