Show n S THE VOICE OF BUSINESS i Higher dining costs courtesy of f Con Congress resS By Richard L. L Lesher President Chamber of Commerce of the United States Congress is pondering a bill that could Ca a raise the cost of eating out OlIt Cb b result in a mandatory service charge being attached to your restaurant check and c cause a loss of jobs in the restaurant industry As you might expect its it's being proposed to help the restaurant workers And the issue is so complex that only someone familiar with the workings of the industry is likely to spot the well-hidden well flaws in this legislation WHAT'S involved is a change in the Fair Labor Standards Act which would eliminate the tip credit against the minimum wage As tl things now stand an employer may take a 50 per percent percent percent cent credit against the minimum wage if the employee is making at least that much in tips In other w words words' if the applicable minimum wage rate is say an hour and a waiter or waitress is averaging at least an hour in tips then the employer is required to pay only an hour in salary If that sounds cheap think of it this way Under the present system the employee cannot do worse than the minimum wage and may well do better depending on tips NOW CONSIDER what would happen if the tip credit is abolished Many restaurant owners would suddenly find themselves faced with the need to increase salaries by per cent How flow would they recover such a Jarge arge increase in expenses expenses expenses ex ex- ex- ex Here are the possibilities 1 Charge the customer higher prices either with or without permitting tipping to the check a mandatory mandatory mandatory man man- service charge 3 Lay Layoff off employees and reduce service to the customer 4 Close the restaurant Sources in the restaurant industry tell me that the second mandatory service the most likely to be adopted although we would undoubtedly see a mixture of all four These possibilities are not purely theoretical California abolished its own tip credit in January of this year According to the president of one national restaurant chain the consequences consequences consequences con con- sequences for them were were as follows In order to adjust we e reduced our California employment employment employment em em- by 71 per cent reduced total hours worked per pay pay period per cent and had to raise prices 7 7 percent Interestingly enough a mandatory service charge is not popular with the waiters walters and waitresses who are supposed supposed supposed sup sup- posed to benefit from tl this s legislation Why Because two things would happen under a mandatory service charge system 1 The employees would go on straight salary with no chan chance e of making more 2 The employer would be begetting begetting begetting getting what the employees used to get In tips tip And theres there's no requirement that all of the service charge income has to togo togo togo go into salaries as long as those salaries at least meet the minimum wage A V WAITRESS for the above abovementioned abovementioned abovementioned mentioned chain Theresa Barrett of Fairfax Virginia got gota a a- a chance to talk to some of the key congressional aides aldes involved involved involved in in- in putting together tl this s legislation She was so incensed by the experience she wrote a aletter aletter aletter letter to the other employees of the chain urging them to oppose oppose oppose op op- op- op pose abolition of the tip credit Here is how she describes the interviews Not one of these representatives could give me a reason for their actions In fact one person said Who said we have to have a reason It was even more shocking to find that they knew nothing about restaurants declaring wages or tipping procedures yet these are the people who will be advising our Congress how Chow to vote on the minimum wage bill |