Question 5: Do tipped workers need a raise? Controversial measure heads to voters

Voters will decide on Election Day whether to raise the minimum wage for tipped workers in Massachusetts, a controversial ballot initiative known as Question 5 that could change the landscape for the restaurant and bar industry and other jobs where tips are key to livelihoods.

Proponents of the measure believe it could offer greater financial stability for tipped workers, while opponents argue that its unintended consequences will yield more harm than good for both workers and employers.

Question 5 would gradually increase the minimum hourly wage for tipped workers from $6.75 excluding tips to $15 excluding tips over the course of five years. Currently, if a tipped worker’s $6.75 hourly wage plus their tips do not add up to a $15 per hour wage, their employer is required to pay them the difference. This would still be the case through the end of 2028 should the measure pass. The proposed law would permit employers to calculate this difference over the entire weekly or biweekly payroll period.

Under this proposal, employers paying tipped employees a wage that is at least the state minimum wage will also be allowed to administer a “tip pool” combining all of the tips received by tipped workers from customers and distributing them among all non-management workers, including non-tipped workers.

One Fair Wage, the advocacy group behind the initiative petition proposing the measure, estimates that about 240,000 Massachusetts workers would be impacted by this proposed law. In addition to financial stability for tipped workers, they contend the measure would reduce employee turnover and improve service quality.

In opposition, the Committee to Protect Tips cites the existing state and federal protections requiring that tipped workers make the minimum wage even if their tips fall short, and states that the implementation of such laws in other states and in Washington, D.C., have led to many workers losing or leaving their jobs. The organization also contends that the measure would reduce overall wages for workers while increasing costs for businesses and consumers, cautioning voters that the ballot question is “funded by a radical group from California,” referring to One Fair Wage.

A ‘yes’ vote

Those who support the ballot measure share concerns that expecting customer gratuity to bring tipped workers up to the minimum wage can perpetuate inequality among the populations that have historically made up the majority of tipped workers, and that the protections in place to guard wages for these workers are not adequate enough to ensure financial stability.

In Turners Falls, Jillian Fishman owns the restaurant Dreamhouse on 3rd Street. Fishman opened the restaurant in June of this year after having worked in the restaurant industry for two decades.

Fishman pays all staff members $27 an hour, with a 20% “hospitality fee” listed on the bill. This system is different to tipping as it is included on the bill, and is taxed differently than tipping.

Fishman said that from her perspective, it’s important to pay a living wage, but she understands how this shift in pay for workers could be difficult for other businesses that don’t follow a similar structure as Dreamhouse. The hospitality fee goes into a bank account for the restaurant that then allows Fishman to pay her staff the $27 an hour wage.

Fishman also notes that adding tip pooling to the initiative feels as if it’s “burying the lede.” As someone who has worked as a tipped worker making minimum wage, she feels that people will still want to tip their servers.

In addition, Fishman believes that the measure would lead tipping to be seen more as a reward for good service than a necessity.

Carrie Baker, professor of the study of women and gender at Smith College, said that about 68% of restaurant servers are women, many of whom are women of color or single mothers. She contends that a “dependence” on tips can create high rates of sexual harassment, because these women have to “smile and take it” to earn the tips they need.

“It’s often these large corporations that make a lot of money paying people low wages and expecting customers to make up the difference,” said Baker. “The kinds of restaurants that women are concentrated in are these chain restaurants, or bars or diners.”

Baker said that women are typically concentrated in “lower end” restaurants with lower tips and often lower quality work environments, while men tend to be concentrated in “higher end” restaurants where tips are abundant, which perpetuates the gender wage gap. The gap between female and male economic status, she said, is exacerbated by the fact that women are much more likely to be single parents than men.

She also argues that many small businesses already pay the full minimum wage plus tips, and that this measure would require large corporations to do so as well.

Baker also takes issue with the historical precedent behind tipped wages, which “comes from our history of slavery.” After enslaved people in the U.S. were freed, she said, some of the only places willing to hire them were restaurants and other places offering tipped positions where they could be paid abysmally low wages by the business, relying heavily on the reward of a customer’s tip for their service.

Ava LeBlanc, a junior at Smith College who has worked at Blueprint New American Bar and Grill for the past two years when she returns home to Westminster, takes issue with this history behind tipping, and believes that tips should only be given on top of the minimum wage rather than helping bring wages up to that level.

Raising the tipped minimum wage, LeBlanc said, would create more stability for herself and her colleagues. She said that, for many of her fellow servers, their wages can be hard to rely on as a livelihood since they can vary greatly with tips, causing turnover as servers leave to find a “more reliable wage” instead of staying at a job that’s “familiar and that they’re well trained in.”

“Well over 70% of the other servers that I work with are single mothers,” said LeBlanc. “I’d love to see them be able to rely on a stable wage instead of wondering if it’s going to be a $50 night or a $200 night.”

While Massachusetts law requires that businesses make up the difference if a tipped worker’s hourly rate plus tips doesn’t equal $15 per hour at the end of a shift, LeBlanc believes it is not adequately enforced, which contributes greatly to her support for the measure.

A ‘no’ vote

Among those opposed to the measure, common concerns are that the increased minimum wage requirement will threaten small businesses while large corporations protect themselves with higher prices, and that tip pooling will be a disincentive for the relationship-building between tipped workers and customers that has become an integral part of such industries.

Ryan Keech, assistant general manager at Fitzwilly’s Restaurant in Northampton, worries that the measure will put an outsize financial burden on small businesses, leading them to downsize and even lay off workers. He also believes that some customers may react to the passage of this measure by tipping less because they don’t think the workers need the tips anymore.

Because of existing protections requiring employers to make up the difference if tipped workers’ hourly wage plus tips doesn’t add up to the state’s $15 hourly minimum wage, Keech predicts that the proposed law would have no impact on tipped workers’ minimum pay, but would put stress on small businesses and likely detract from these workers’ maximum possible pay.

“It’s going to really negatively impact small businesses,” said Keech. “We’re supporting our staff in this endeavor because it’s going to negatively impact their tips in the long run.”

The Massachusetts Restaurant Association (MRA) and Greater Northampton Chamber of Commerce have also publicly voiced opposition to the measure.

The MRA said that in a recent survey of servers and bartenders, 91% of respondents prefer the current earning system, with a lower base minimum wage and the potential to earn more than the minimum wage through tips, with 56% reporting that they earn more than $30 an hour.

In what the Northampton Chamber calls a “rare public position,” the group issued a statement supporting a “no” vote on the question because they are concerned about increased labor costs for businesses and the potential that workers would suffer from lower take-home pay.

“Many GNCC restaurant members are concerned that increased labor costs could force restaurants to reduce hours for workers, provide fewer jobs, raise menu prices for customers, or even close their doors,” Vince Jackson, executive director of the chamber, said in a statement.

Easthampton Mayor Nicole LaChapelle has also raised concerns about the potential impacts the measure could have on small businesses, but also on the service they offer customers.

Because large corporations can afford to protect themselves with higher prices in the face of raised wage requirements, LaChapelle believes that the biggest impact will fall on small businesses. But she also worries that tip pooling could lead to the exploitation of “back of house” workers while lowering incentives for “above and beyond” service by “front of house” staff, particularly in restaurants.

LaChapelle believes that pooling tips to be shared with the kitchen  or “back of house” workers may incentivize some businesses to cut their pay or offer them fewer raises, as these workers are in many cases paid more than tipped workers in restaurants to account for the fact that they do not receive tips.

For servers and hosts in the “front of house” at restaurants, LaChapelle sees where the ballot measure could remove the incentive to build relationships with customers and provide great service since tips will be evenly distributed among the staff — even those who might have been having a bad night.

“The front of the house is not just putting down a plate of food or a cup of coffee,” said LaChapelle. “I am extremely concerned about the unintended consequences and the disincentives for front of house staff.”

At Eastside Grill in Northampton, tipped workers pride themselves greatly on the relationships they build through their service, and share this worry that the potential for a “tip pool” might lead some to leave those relationships by the wayside.

“I personally would never work at a restaurant where they pool tips,” said Akasia McQuaid, a server at Eastside Grill. “Why should I have to share the tips I’ve earned with someone who might not be pulling their weight?”

McQuaid explained that she and her fellow servers at Eastside Grill have all been in the restaurant industry for years, all having worked their way up from “lower end” restaurants and diners. They share a concern that the ballot measure would create a disincentive for tipping, eliminating the reward for their years of work mastering their work.

“They’re fixing something that’s not broken,” said Diane Frary, a server at Eastside Grill for 34 years, about the measure. “I have very high standards for my work, and I like to be awarded for my work … it’s like a demotion for all of us.”

Mad Lawrence, bar manager and bartender at Eastside Grill, said that what has kept him passionate about the restaurant industry has been the relationships forged between staff and customers, as well as among the staff members themselves. But Lawrence said that the new minimum wage requirement would be a major cost for restaurants like Eastside Grill, leading them to shrink their operations in terms of space, hours, and in some cases, staff.

“There’s a huge amount of community in our industry,” said Lawrence. “That’s a huge part of our business.”

Lawrence also contends that businesses are currently free to raise their wages or pool tips if they wish to, but that many choose not to because it “doesn’t work for them,” whereas this ballot measure would remove that choice.

“We do have the security of the minimum wage behind us, that’s been implemented for decades,” Lawrence said in reference to the law requiring employers to ensure that tipped workers reach the $15 per hour threshold by making up for any lack of tips. Lawrence added that, while some businesses may not enforce that law, the issue there lies with a lack of investigation into those businesses and should not result in the “punishment” of law-abiding businesses.

Lawrence, McQuaid and Frary all noted additionally that they typically make far more than $15 per hour through their tips, which was often the case even when they worked in lower-end restaurants.

Aly Didkovsky, another Eastside Grill server, previously worked as a server in California, where regulations similar to this measure have already been implemented, and said that it is “not working in many situations” as most businesses opt to pool tips, leading to lower tips for the workers who earned them. Didkovsky noted that she has seen many businesses add a “service charge,” like the 20% “hospitality fee” charged by Fishman at Dreamhouse, both to make up for a decline in tips and to garner the income needed to pay the staff’s raised wages.

McQuaid said that such a service charge would be seen by many customers as a “required tip” that they must pay regardless of their satisfaction with their service, and with no guarantee that it is given to the servers. Similarly, McQuaid noted that at restaurants that implement a “tip pool,” customers would no longer have the option to reward just their server for their great service, and would instead have to reward the entire staff for the work of one person.

Erin-Leigh Hoffman, staff writer for the Greenfield Recorder, contributed to this report. Alexa Lewis can be reached at alewis@gazettenet.com.