Waiting for wage increases

Tips are scarcer these days for waitstaff across Richmond.

Juanita has worked as a full-time waitress since she was a teenager, and for most of that time, she’s made the exact same salary: $2.13 an hour plus tips.

Because of the economic decline, she doesn’t make as much now in tips as she did a decade or more ago, Juanita said. She works for a full-service chain restaurant in Chesterfield County and asked that her last name not be used.

“People, when they go out to eat, where before they might have left me $10 to $15, they might only leave me $5 now,” Juanita said.
When a patron doesn’t tip or monopolizes a table for hours, she is essentially working for free.

“If I wasn’t married, I couldn’t afford to pay the rent for my house and support my children,” she said.

Many weeks, her base salary is as little as $90 per paycheck, she said.

Despite the fact that Congress has raised the federal minimum wage for other workers several times in recent years, the base minimum wage for restaurant waitstaff (not including tips) has remained at $2.13 per hour since 1991.

By contrast, Congress raised the federal minimum wage for all other workers from $6.55 per hour to $7.25 per hour in July.  The National Employment Law Project, a New York-based nonprofit advocacy group for the working poor and unemployed, issued a report this year calling on Congress and state governments to raise the minimum wage for tipped employees, noting that it “has remained frozen since 1991 at a meager $2.13 per hour – just $4,430 per year for a full-time worker.”

The poverty rate among waitstaff is three times greater than the rest of the U.S. work force, the report states, and waitstaff are twice as likely not to have health insurance. Moreover, that $2.13 is worth far less than it was in 1991 because of inflation.

The rationale for the lower minimum wage for waiters and waitresses is that they should be able to make much more than that when they add in their income from tips and gratuities. According to the U.S. Department of Labor, tipped employees are those who customarily and regularly receive more than $30 a month in tips. Employers must make up the difference if an employee’s tipped income and hourly wage don’t add up to the regular minimum wage of $7.25 per hour.

Not every restaurant pays their waiters and waitresses the federal minimum wage. Some pay more because the tipped income isn’t always steady, and they want to ensure that they retain good staff members and can continue providing a high level of service.

“I pay my staff a good hourly rate” – $7.50 an hour plus tips – “because I am so service-oriented at both of the clubs I own,” saidMike Hatch, owner of the Brandermill Country Club.

Similarly, Sue Young, co-owner of the Half Way House restaurant, which is housed in a historic 1760 tavern just north of Chester, says she pays more than the minimum hourly wage in order to get a “high-quality staff” and reduce turnover.

Half Way House is a bit more upscale, so the amount that her customers tip hasn’t really declined, she says, but her servers have seen some decline in tipped income due to less overall business.

“They’re not making less [in tips] per table, but there are fewer tables, so it’s down in that respect,” Young said.
If there is any momentum building to raise the minimum wage for tipped employees, the Virginia Hospitality and Travel Association isn’t on board. Officials there think that raising the minimum wage for waitstaff would be too harmful to small businesses.

“VHTA opposes all efforts to raise the minimum wage,” said VHTA Executive Director Barry Hawkins. “The restaurants are struggling in this economy as it is now, and any increase to the restaurateurs is going to be difficult in this economy.”

Moreover, a 2007 survey by the National Restaurant Association reported that the average hourly pay for waitstaff across the nation ranged from $17.10 to $22.20.

Longtime county restaurateur and former county supervisor Dickie King doesn’t deny that tips are down for his servers at his King’s Korner restaurant and catering business at the county airport. But business overall has also been down, says King, noting that his catering business lost major corporate clients such as Circuit City and LandAmerica in recent years.

“At one time, we were down 44 percent [in earnings],” King said

King pays his staff the $2.13 minimum wage and provides his staff with meals. After tips, they generally make $10 to $12 per hour.
In addition to business being down, the state government recently doubled the amount of unemployment tax he has to pay. In this economic climate, King said, raising the minimum wage for his staff would be another burden.

“If you’ve got less money coming in, and you’ve got to pay more money going out, the only way you can really adjust expenses in a fast way is … you have to cut payroll,” said King.

And layoffs mean more people flooding the unemployment rolls and requesting government aid, which means the government will seek more tax revenue from business. “The greater the burden on the business community in hard times, the greater the burden on society becomes because of the decisions we have to make,” said King.

Sissy Miller, who has worked part time as a waitress at King’s Korner for the past three years, said that on a good day she can still make about $10 to $12 per hour. On a slow day, she might make about $7.50 per hour.

“Around the holidays, people are a little more generous,” she said, “but overall since the economy has been in the predicament it has been in, we have noticed a difference in the way people tip.”

This story first ran in the Chesterfield Observer, which is an RBS news partner.

Notify of
1 Comment
newest most voted
Inline Feedbacks
View all comments
Arch Wallace
Arch Wallace
10 years ago

Restaurants are required by law to make up the difference between the $2.13 waitstaff minimum wage and the regular minimum wage if the employee’s tips fail to make up that difference. So, for restaurants that are compliant with the law, the raise in the minimum wage did apply to waitstaff already. Owners of restaurants report their employee’s tips to the payroll company they use, like mine, Checkright. We perform the minimum wage calculation for them and add the wage, if necessary, to bring the pay up to minimum. So, even though this recession is certainly hurting the restaurant industry and… Read more »