Imagine a public policy so flawed that it prompts a famous Maine restaurant to close for a day to allow its workers to go to Augusta to try to change it. That’s just what happened last week when Moody’s Diner in Waldoboro allowed their workers to join hundreds of other restaurant employees from around the state, who also put their lives on hold, to come to Augusta to tell lawmakers about how the loss of the tip credit threatens their livelihoods.
They waited patiently in line during a marathon, 12 and a half hour public hearing before the Legislature’s Labor, Commerce, Research and Economic Development Committee (LRED), which I chair, to talk about the urgency of restoring the tip credit.
Question 4 on last November’s Maine ballot, which raised the state’s minimum wage, also called for the phasing out of the tip credit. Under the tip credit system, servers have always been guaranteed to make at least the minimum wage, but their earnings have been supplemented by tips from restaurant patrons, allowing them to make a very good living. In fact, they are often the highest paid workers at the restaurant.
Until now.
The change in the tip credit law has led to confusion at Maine’s restaurants and bars. Customers are unsure of whether they should still be tipping their servers at all since those workers are now earning a slightly higher minimum wage. This has resulted in lower paychecks for those who make a living as food servers and bartenders.
“People seem confused about it all,” testified Brooke Carpentier of Brunswick, who has worked as a server for more than 20 years. “(They are) asking what we are making an hour and want to know if they still leave a tip. It is awkward.”
Janice Philbrick told the committee that since her husband became ill a couple of years ago, they now primarily rely on her wages as a server. “Since January 7th my hours have been cut and there has been a decrease in tips because people believe we are now making $12.00 an hour. Customers have told me this,” she said.
My fellow LCRED Committee members and I listened to Brooke, Janice and dozens of other hardworking Mainers talk about the impact the new law is having on them, and encourage us to reinstate the tip credit.
Carpentier continued, “Thankfully working long hours makes it possible to send my kids to summer camps and get them enrolled in sports during the school year. I don’t want to move but if this (the tip credit) isn’t reinstated then I would have to go where I would get the most money for what I’m good at doing.”
Cindy Bradford, who owns the Market Place Café in Wiscasset, testified that the loss of the tip credit and higher minimum wage may lead to the demise of her business. “After running my budget projections for the next year, I came to the sad realization that because of the increase in the minimum wage along with the elimination of the tip credit, this business will no longer be sustainable,” she said.
Rachel Davenport, a server, bartender and event planner at Clay Hill Farm in York said, “As a single woman, I pay all my expenses myself; if my income dramatically decreases over the next few years, I will not be able to afford my mortgage, car payment, oil for my home, as I have planned, based on my yearly income.”
Also attending the hearing were members of the Maine People’s Alliance, an organization that backed the referendum to increase the minimum wage and eliminate the tip credit. Remarkably, they were there to “inform” the Committee that the hundreds of servers who showed up at the State House were wrong, and that the elimination of the tip credit was in their best financial interests.
One of them, who was paid to gather signatures to put the minimum wage question on the ballot, admitted to the committee that she didn’t understand the petition that she was asking people to sign. After hearing the servers’ testimony, she agreed that the tip credit must be restored.
Even before last November, there was almost universal agreement in Augusta that Maine’s minimum wage should be raised. In fact, I had a bill that would have done that, but it fell victim to partisan politics. But it is also very clear that Question 4, as written, is not the answer. It is now up to us in the Legislature to find a better solution.
(207) 287-1505 | (800) 423-6900 | amy.volk@legislature.maine.gov