Did you know that in most states, when you tip your waitress, you’re actually paying her wages?
That’s because the federal minimum wage law allows employers of tipped workers to pay them as little as $2.13 per hour (the “tipped minimum cash wage”), and count your tips to fulfill their obligation to pay their workers the minimum wage. While employers are legally required to make up the difference between $2.13 and the regular minimum wage if tips fall short, studies show [PDF] that all too often employers don’t do this. This is particularly a problem for women, who are two-thirds of tipped workers. Read more »
Let’s say your employer pays you just $2.13 an hour (the cash wage for many tipped workers around the country). Then you get an incredibly generous tip of $1,000 – that an anonymous customer wanted you to have (as only the luckiest servers in the country might get). And your employer won’t let you keep it.
I think that’s a pretty clear case of adding insult to injury. The math might look a little like this:
Insult ($2.13/hour) + Injury (taking away your once-in-a-lifetime $1,000 tip) = YOUR CASH WAGE IS STILL $2.13 AN HOUR.*
*Here’s the deal: Your employer is allowed to pay you a minimum cash wage of just $2.13 an hour. You’re still entitled to the full minimum wage of $7.25 an hour, counting your tips, but lots of tipped workers fall short because of wage theft and other illegal practices. Read more »
When policymakers discuss solutions to help nearly 20 million low-wage workers make ends meet, the focus is often on raising wages. Raising the minimum wage and tipped minimum wage would go a long way to help these workers, but policymakers should also be concerned about curbing abusive scheduling practices that create incredible uncertainty for workers and their families about whether they will be given enough hours on the schedule to make ends meet and the timing of those hours.
Women are disproportionately affected by challenging work schedules because women hold the majority of low-wage jobs and often have significant caregiving responsibilities outside of work, but men in low-wage jobs also suffer as a result of often difficult, and sometimes abusive work scheduling practices. A new issue brief recently released by NWLC describes five of the most common scheduling challenges faced by workers in low-wage jobs and the collateral damage they impose on workers and their families. Here are some highlights: Read more »
A new report issued by the White House this morning provides more compelling evidence that raising the minimum wage is critical for advancing fair pay and economic security for women. The report evaluates the impact of the Fair Minimum Wage Act proposed by Senator Harkin (D-IA) and Representative Miller (D-CA) and, like the NWLC analysis of the proposal, finds that women would especially benefit from raising the minimum wage, now just $7.25 an hour, to $10.10 per hour, increasing the tipped minimum cash wage – now just $2.13 an hour – to 70 percent of the minimum wage, and indexing these wages for inflation.
Here are some key findings from the report: Read more »
As the single mother of two young children, Losia Nyankale’s job is what keeps her family afloat. But between earning low wages and having no paid sick days, Losia is just one child care emergency away from losing her job. This pressure made it difficult for Losia to care for her mother when she suffered a stroke, and it forced Losia to return to work immediately after the birth of her second child—despite her doctor’s orders. Losia works long hours to be able to afford her basic living expenses and child care. And she often finds herself in an all-too familiar bind: if she picks up more shifts to earn a better living, the child care costs that she can barely afford now will rise, and she’ll have even less time with her family. Losia would like to go back to school to improve her situation, but the combination of low wages, lack of paid sick days, and lack of affordable child care, keep that dream from coming true for now.
For many years Teresa worked on call as a banquet server and had an extremely difficult time arranging child care at the last minute for her children because of her unpredictable schedule. She found herself turning down jobs or quitting jobs where she wasn’t able to arrange child care, even though she needed the income badly. Like Losia, Teresa was a single mom who often didn’t earn enough money to pay for care. Read more »
It’s the first week in June: temperatures are rising, the cicadas are swarming, and many state legislatures are wrapping up their 2013 sessions. This flurry of legislative activity has included several important steps forward on the minimum wage.
The biggest news comes from Connecticut, where last week the legislature passed – and the governor signed – a bill to increase the state minimum wage from $8.25 to $9.00 per hour by January 1, 2015. This compromise measure will give a much-needed raise to minimum wage workers in Connecticut, about six in ten of whom are women. An additional 75 cents per hour amounts to $1,500 a year for full-time work, bringing annual wages up from $16,500 to $18,000. That’s a meaningful boost, but still about $500 short of lifting a family of three above the poverty line, much less what is needed in a high-cost state like Connecticut.
And there is a catch: Connecticut’s new law actually reduces the percentage of the minimum wage that employers must pay to workers who receive tips. Today, tipped workers like restaurant servers are entitled to a minimum cash wage that is 69 percent of Connecticut’s full minimum wage ($5.69 per hour). In 2015, when the regular minimum wage is $9.00 instead of $8.25 per hour, tipped workers will be entitled to a minimum cash wage that is 63.2 percent of the full minimum wage ($5.69 per hour) – that is, they will get no raise at all. While most of Connecticut’s minimum wage workers who will get a raise are women, women are also a majority of the tipped workers who will suffer from this unfair exclusion. Read more »
Today is kind of a big deal for advocates pushing for a higher minimum wage (myself included). As you may have heard, in his State of the Union address last night, President Obama called for raising the minimum wage and indexing it to keep pace with inflation – and did so eloquently, I might add:
"We know our economy is stronger when we reward an honest day’s work with honest wages. But today, a full-time worker making the minimum wage earns $14,500 a year. Even with the tax relief we’ve put in place, a family with two kids that earns the minimum wage still lives below the poverty line. That’s wrong. …
Tonight, let’s declare that in the wealthiest nation on Earth, no one who works full-time should have to live in poverty, and raise the federal minimum wage to $9.00 an hour. This single step would raise the incomes of millions of working families. …For businesses across the country, it would mean customers with more money in their pockets. In fact, working folks shouldn’t have to wait year after year for the minimum wage to go up while CEO pay has never been higher. So here’s an idea that Governor Romney and I actually agreed on last year: let’s tie the minimum wage to the cost of living, so that it finally becomes a wage you can live on."
And there’s another reason today is important in the minimum wage fight: February 13 is 2.13 – and $2.13 is the minimum hourly cash wage that millions of tipped workers have been paid since 1991. (Though President Obama didn’t mention the tipped minimum wage in his remarks, the White House affirms that it should be increased along with the regular minimum wage.) Today, tipped workers from across the country convened in Washington, DC to call for the fair wages they have been denied for far too long. Read more »
Remember when a hot dog and a soda cost 39 cents? Yeah, neither do we.
We all know that restaurant prices rise nearly every year with inflation. The cost of everything from groceries to gas to rent rises, too. But many workers have not seen their wages rise in years, leaving them straining to make ends meet on paychecks that keep getting smaller relative to the cost of living.
For our neighbors in Maryland, the minimum wage is stuck at $7.25 per hour, the federal minimum, and the minimum cash wage for tipped workers is woefully low at $3.63 per hour (though higher than the federal floor of $2.13 per hour). If the minimum wage had risen with inflation over the past several decades, it would be close to $10.60 per hour today. But neither the minimum wage nor the tipped minimum wage is linked to inflation in Maryland, so the purchasing power of these extremely low wages erodes further each year.