By now, everyone has heard of the
"trifecta" bill that the House Republicans dreamed up, passed, and sent to the Senate late last week -- cutting the estate tax, providing for the tax extenders, and
"raising" the minimum wage.
And by now, everyone should have heard that the bill contains an insidious strike at states that don't allow employers to have a tip credit, cutting some workers' wages by as much as $5.50 per hour.
But what you probably don't know is this: for some low-wage workers, the Republican minimum wage bill cuts your wages as much as 100%. It actually eliminates any minimum wage protections at all for thousands of workers.
I explain below the fold.
Here's how it works.
In a favor to the National Restaurant Association, the Republican minimum wage bill goes after states that have decided to protect tipped employees' wages. It preempts state minimum wage laws with respect to tipped employees (like waiters) where a state has not allowed an employer to use a "tip credit" against an employee's wages. This means that, in those states (namely, AK, CA, MN, NV, OR, WA, and MT) where state law has required employers to pay the full state minimum wage to wait staff, regardless of their tips, those employers may now only pay wait staff the federal tip credit wage of $2.13 per hour (the rest to be made up by tips, i.e., the tip credit). So waiters in Washington go from $7.63 per hour (the full state minimum wage) to $2.13 per hour (the federal tip credit rate), a $5.50 wage cut under the Republican "minimum wage" bill.
But guess what, folks... Here's the much bigger rub.
Federal law doesn't cover all employees. It only covers those employees at businesses that have annual gross receipts of at least $500,000. State minimum wage laws -- in all of the above described states -- are intended to capture all employees (with a few specific exceptions) at establishments above AND below the $500,000 gross-receipt threshold. So the beauty salon or the downtown pizza parlor that brings in $400,000 per year is covered by the state minimum wage laws but not the federal minimum wage laws.
But what does the Republican bill do? It says, if you're a state that does not allow the tip credit, your minimum wage law is UNENFORCEABLE with respect to tipped employees. So the only minimum wage law that is enforceable for tipped employees in such a state would be the federal law. The problem for thousands of tipped workers in these states is that their employer is not covered by federal law, only state law. They work at businesses with gross receipts of less than $500,000 per year.
So their employer has no minimum wage requirements once you preempt and render unenforceable the state law. These workers can then be paid 10 cents an hour. Or they can be paid no wage at all. They can be told that they are ONLY WORKING FOR TIPS. So a waiter at Jim Bob's BBQ Shack in rural Washington goes from $7.63 per hour in wages to $0 per hour in wages, only bringing home tips. If he works 8 hours one day and only makes $12 in tips, then that's all he gets to take home.
Get the word out and spread it around. Recommend this diary. Call your Senator. Tell them to kill the trifecta sham bill.