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Last year, on February 10, 2011, Donna F. Edwards (MD-04), a Democrat of course, introduced H.R. 631: Wages Act: To amend the Fair Labor Standards Act of 1938 to establish a base minimum wage for tipped employees.

The generous provisions of that bill are as follows:


    Section 3(m)(1) of the Fair Labor Standards Act of 1938 (29 U.S.C. 203(m)(1)) is amended by adding before the semicolon the following: `, except that, for purposes of this paragraph, the cash wage paid such employee shall be not less than--

            `(A) $3.75 an hour beginning 90 days after the date of enactment of the Working for Adequate Gains for Employment in Services Act;

            `(B) $5.00 an hour beginning 1 year after the date on which the change required by subparagraph (A) takes effect; and

            `(C) beginning 2 years after the date on which the change required by subparagraph (A) takes effect and adjusted as necessary thereafter, 70 percent of the wage in effect under section 6(a)(1) but in no case less than $5.50 an hour.'.

The usual progressive suspects co-signed this bill. Don't look for any blue-nosed Dems as co-signers though.

Of course, the bill went nowhere. It was referred to the Subcommittee on Workforce Protections and there it languishes forever, or until it dies at the end of this congress.

Undoubtedly, there are a lot of American workers who slave at the princely rate of $3.75/hr, most of them women. Those persons make $7800 annually. If you wager that they might actually coup half of their wages in tip compensation, that would rise to $10,700 annually.

Tipped workers in posh establishments very likely have a much higher hourly and a much higher rate of tipping, um, let's say they make the huge sum of $10/hr. Their annual total would be $20,800. If you add in calculated averaged out tips, it could hit $31,200. These figures are calculated on 52 weeks of 40 hours each, with no time off for sick leave or vacation, because I'm going to assume that the vast majority of these workers are not eligible for either sick pay or vacation. If they take time off for sickness or a break from work, I'm going to assume that there is no compensation for such time and I'll damn betcha I'm pretty safe in my assumptions.

You can probably also safely assume that if an establishment shuts down for holidays that tipped employees are left without income during that time.

How very interesting it is to compare the compensation of these workers with the AP highest paid CEOs in 2011, calculating their hourly income assuming they worked 40 hours a week for 52 weeks annually, 2,080 hours:

1. David Simon, Simon Property Group, $137.2 million, $65,961.54 per hour.

2. Leslie Moonves, CBS, $68.4 million, $32,884.62 per hour.

3. David M. Zaslav, Discovery Communications, $52.4 million, $25,192.31 hourly.

4. Sanjay K. Jha, Motorola Mobility, $47.2 million, $22,692.31 hourly.

5. Philippe P. Dauman, Viacom, $43.1 million, $20,721.15 hourly.

6. David M. Cote, Honeywell International, $35.7 million, $17,163.46 hourly.

7. Robert A. Iger, Walt Disney, $31.4 million, $15,096.15 hourly.

8. Clarence P. Cazalot Jr., Marathon Oil, $29.9 million, $14,375.00 hourly.

9. John P. Daane, Altera, $29.6, million, $14,230.77 hourly.

10. Alan Mulally, Ford Motor, $29.5 million, $14,182.69 hourly.

Jeepers. Those CEOs who earn less per hour than top-paid tip employee earn annually are mere cawkers who talk flash.

But, one must never forget there are other compensations for CEOs:

short term incentives (STIs), sometimes known as bonuses
long-term incentive plans (LTIP)
employee benefits
paid expenses (perquisites)
And never forget the Golden Parachute, available only to the elite.
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Comment Preferences

  •  The Minimum Wage should be (4+ / 0-)

    the minimum wage for everyone, period. And it should be what it was back in the 1960s, with inflation.

    This Rover crossed over.. Willie Nelson, written by Dorothy Fields

    by Karl Rover on Sat Jul 28, 2012 at 01:29:24 PM PDT

  •  Karen - I favor higher minimum wages (3+ / 0-)
    Recommended by:
    FG, 1918, debedb

    for tipped employees. However, why compare their wages to the total compensation of Fortune 500 CEOs who are compensated primarily with equity, and manage tens of thousands of employees and billions in revenue? Would it not be more appropriate to compare the total compensation of tipped employees with other jobs that require the same education and skills? Or even compare their compensation with a restaurant manager, or someone else working directly with customers in the food service and hospitality industry?

    Comparing tipped employees compensation to CEO pay may get you a few RECs here at DKOS, but it will never motivate legislators, even Dems.

    "let's talk about that"

    by VClib on Sat Jul 28, 2012 at 01:55:44 PM PDT

  •  In Europe it's very easy for Americans to (5+ / 0-)

    over tip. Why? Because waitstaff do not depend on tips to provide their income; they are sufficiently compensated by their wages. What a concept!

    I would be great if the public were not held responsible for making sure that their server could pay the bills here in the US.

    "The object of persecution is persecution. The object of torture is torture. The object of power is power. Now do you begin to understand me?" ~Orwell, "1984"

    by Lily O Lady on Sat Jul 28, 2012 at 02:29:18 PM PDT

    •  It's one reason I admire the Japanese (3+ / 0-)
      Because waitstaff do not depend on tips to provide their income; they are sufficiently compensated by their wages. What a concept!
      I've never really cared for the concept of tipping to begin with. It's an insulting and demeaning practice, for both the employees and customers.

      Better if restaurants just raised prices 20% or so and pay the staff a proper wage to begin with.

      That, as the saying goes, sounds easier.

      "Tell me something, it's still 'We the people', right?"

      by radabush on Sat Jul 28, 2012 at 09:29:50 PM PDT

      [ Parent ]

  •  Also remember... (3+ / 0-)

    ... that as a rule, waitstaff don't work 40 hours a week.  If they worked anything close to full time hours, their employers might be required to provide them with benefits.  

    Almost all waitstaff jobs are part time.  And restaurant managers work very hard to make sure they only have enough waiters working at a given hour that they actually need -- and not a single hour beyond that.  

    Kudos to Donna Edwards for trying, though.  Waitstaff SHOULD be getting a full minimum wage.  

  •  You just lighted a fuse. (2+ / 0-)

    I have a dog in this fight.

    I've worked intermittently in tipped, minimum wage exempt, employment since the 1970s.

    Restaurants today have figured out how to game the system. I could write a book, but I'll do my best to be succinct and I hope clear.

    There are two HUGE issues beyond the simple sub minimum wage that make a mockery of the Fair Labors Standards Act tip exemption.

    1) Requiring minimum wage exempt employees to perform labor that has nothing whatsoever to do with the activities for which tips are earned. The restaurant where I work makes us, mop, clean the kitchen, stock, clean equipment, etc., etc. etc. before, during and after the activities that actually earn tips.

    2) The tip-out. Incredibly, the restaurant where I work deducts three percent of gross sales --not tips--from the top of your tips to augment the salaries of workers who should otherwise be earning minimum wage. That's a hit. For me, it amounted to over $3,000 last year.

    Now, and this is truly unbelievable, YOU ARE RESPONSIBLE FOR THE TAXES OWED FOR THE TIP-OUT DEDUCTIONS FROM YOUR CHECK. This literally inflated my actual earnings by over $3,000 last year.

    That's right boys and girls, restaurants are routinely reporting as income to the IRS wages never received by the employee.

    Now, here's the shocker. The employees who receive the tip outs are also taxed on the wages.

    So the money is double taxed. My question to my (practically illiterate bosses) is "who the hell gets to keep the extra SSI and Medicare taxes received in this double withholding scheme?"

    Their answer, "ask corporate."

    The only good news in all of this is that they're scared to death I'm on to their game and they're afraid to fuck with me. I've told them if they do, I'm going to be at the IRS and DOL within the business day.

    I'd love to discuss this in more detail with a labor lawyer and/or tax expert. If interested, go to and use the contact feature.

    Meantime, God love ya Karen for your interest in this issue. Tipped and rec'ed.

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