As Los Angeles city officials consider hiking the minimum wage to as much as $15.25 an hour, local restaurant owners on Monday proposed a lower wage level for servers who receive tips.
The proposal put forward by a coalition of 300 restaurant owners at a press conference at Taix Restaurant in Echo Park would allow the owners to pay servers the state minimum wage – now at $9 an hour – and then count tips toward meeting the higher citywide minimum wage. If the tips plus state minimum wage fall short of the city minimum wage, the employer would make up the difference.
Restaurant owners tried earlier this year to get similar legislation passed on a statewide basis in Sacramento, but the bill was dropped when it became clear it would not garner enough support to pass. Now, restaurateurs are focused on the local level.
The City Council is weighing two proposals: one by Mayor Eric Garcetti to raise the wage to $13.25 an hour by 2017 and another by six councilmembers to further hike the wage to $15.25 an hour by 2019. Both plans would tie the minimum wage to inflation in the future. The council’s economic development committee just concluded a series of hearings around the city and is set to take up the proposals later this month.
The coalition of local restaurant owners said the restaurant industry’s unique mixture of low margins and large numbers of tipped workers has been ignored by the city as it debates raising the minimum wage.
“Small restaurants needed to be heard,” said restaurant owner George Abou-Daoud. “While the city has conducted a number of studies, none looked at the unique issues of restaurants.”
Owners also contend that requiring all workers to be paid up to $15.25 an hour would disproportionately benefit servers;owners say many servers already earn $20 an hour or more in tips. They say they don’t have the margins to support paying everyone a higher wage and that a tip credit would allow restaurants to pay higher wages to “back of the house” kitchen workers who don’t receive tips.
This argument was made by a local restaurant worker supporting the proposal.
“I don’t need an hourly raise; I already make an extra $20 to $25 an hour in tips,” said Zach Negin, a server at Bestia Restaurant in downtown Los Angeles. “But my coworkers in the kitchen who maybe already make $15 an hour won’t be able to get raises as quickly if I am to get a raise.”
But union advocates pushing for the higher city minimum wage say most servers earn modest hourly tips and therefore need the minimum wage increase as much as other workers.
Los Angeles County Federation of Labor chief Rusty Hicks recently told the Business Journal that a separate wage tier for tipped workers was unacceptable. He said the vast majority of servers make far less than $10 an hour in tips and that a tipped-worker credit would affect a wide range of other industries, from car washes and valet services to hair dressers.
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