Bill would affect pay for servers and bartenders

Lobbyists and lawmakers disagree on whether a proposed option for paying tipped workers is a raise or a cut.
Published February 17 2012
Updated February 17 2012

Cindy Berg remembers the days when she could pay all her bills from restaurant tips.

Those days are long gone, said Berg, who has been a server for about 20 years. Tips dropped off when the economy tanked.

That's why Berg was outraged when she learned this week that Florida lawmakers are considering a bill that would knock back her current wage of $4.65 an hour to $2.13.

"That's ridiculous," said the 47-year-old, who works at an Italian restaurant in St. Pete Beach. "There was a time where as a server that was the best job you could have. … The money is just getting worse and worse and worse, every season."

Under Senate Bill 2106, approved Thursday in the commerce and tourism committee, employers would have another option for how they pay tipped employees.

Currently, tipped employees in Florida are paid with this formula: The state sets a total minimum wage, which must keep pace with the cost of living and is currently $7.67 an hour. From that number, employers subtract a $3.02 "tip credit," a flat amount written into a constitutional amendment voters approved in 2004. The difference — $4.65 an hour — becomes what the restaurant pays the employee no matter the tips.

If employees make good tips during a busy week, they can make well above the minimum wage. If they don't make good tips during a slow week, restaurants make up the difference to ensure they receive minimum wage.

Under the new proposal, restaurants would be allowed to pay servers the current federal tipped minimum of $2.13 in exchange for guaranteeing that with wages and tips their employees will make at least $9.98 an hour. That works out to 130 percent more than the state's current minimum wage of $7.67 for all workers.

"This plan will give Florida the dual advantage of offering the highest state wage guarantee in the country and offering employers more flexibility in how they compensate employees," said Carol Dover, president and CEO of the Florida Restaurant and Lodging Association, which is the main force behind the bill.

But critics say it's just another way for businesses to slash wages for a group of workers who often are at the bottom of the pay scale. For instance, if a server's tips and wages worked out to $10 an hour at the end of the week, his employer would only have to pay $2.13 an hour. Right now the employer would have to pay $4.65 an hour. That would mean less money for the server than under the current system, critics say.

"They're doing this because it benefits employers. They're not doing this to benefit servers or bartenders," said Tampa attorney Loren Donnell, whose firm handles labor-related cases. "In this economy, you're talking about lowering an even subminimum wage requirement."

But Dover and other business advocates say high labor costs are driving restaurants out of business. They also claim some restaurant workers make well above the minimum wage when tips are included and are, in fact, some of the highest paid workers in the industry.

Supporters stress that the new tipped wage structure would be optional, and employers would have to agree to keeping it in place for at least a year.

"The optional wage guarantee in the bill will not be appropriate for all restaurateurs," Dover said. "But on the whole, we believe this legislation will make Florida a more friendly state for employees and a more competitive state for employers."

Berg wonders at what cost.

She and others in the service industry said while it's true the base rate for servers has slowly increased over the past 30 years, the tipping has slid backward, especially over the last few years.

She figures that during an average week during tourist season, she makes about $10 an hour when tips are included.

"Those days of 15 percent tippers, and 20 percent tippers and Christmas tippers are gone. They are gone," Berg said.

Both Berg and her husband work full time and have multiple jobs. She said she isn't sure what she will do if she has to take another cut.

"My husband works 60 to 70 hours a week. I work 40, and we're still barely making it. I've never been in this position in my life," Berg said. "It's just tougher and tougher and tougher."