One general exception to minimum wage laws are so-called tipped workers. People like waiters and delivery drivers who make a great deal of their earnings from tips. Employers face a much lower minimum wage mandate for these workers, but a group of Democrat lawmakers (and one Republican) want to change that.
HB1438, introduced by Rep. Josh Boschee (D-Fargo) and co-sponsored entirely by Democrats with the exception of Rep. Andy Maragos, would step up the minimum wage for tipped workers to $5.25 per hour on August 1st, 2017, and then move the wage up $1.00 per hour every second year until the general minimum wage level is hit:
Like most proposals to raise the minimum wage, this is likely to do more harm than help to tipped workers.
Right now I’d be willing to wager that most tipped workers earn well in excess of the $7.25 minimum wage level applied to non-tipped workers. If the state mandates a higher wage, that’s probably going to hurt tips and these workers may well end up earning less than they did before as customers decide they needn’t tip as much since the workers aren’t really “working for tips” any more.
Not only that, but this would significantly increase costs for the hospitality industry, something that industry would probably respond to with layoffs.
Less income, and fewer jobs. Is that what we want? Rarely do we accomplish anything good when we make it more expense to employ workers. Particularly entry-level workers.
The bill got a hearing this morning in the Industry Business and Labor Committee which kicked out a 10-4 “do not pass” vote that broke down along party lines. I don’t see this bill having much of a future on the floor of the House.