From the House: Eliminating tip credit through referendum petitions is bad policy


A few weeks ago, in a column titled “I Can’t Believe the Elimination of Tip Credit Is Back”, I laid out some initial thoughts and some history on the often misunderstood tip credit. . Tip credit is a payroll policy that’s been around for decades, and it’s preferred by tipping employees – primarily restaurant servers and bartenders (in an industry survey, 97% of tipping employees said that’s how they like to be paid).

Maine’s tipping credit was eliminated by referendum at the ballot box in 2016 against the wishes of the vast majority of tipping employees in our state. Part of the reason for its elimination was that it was one part of a three part issue, and another part of this referendum issue was the increase in the statewide minimum wage . Once it passed, servers immediately saw the effects and rallied to reinstate it. This led to a 2 p.m. committee meeting in April 2017 where hundreds of servers testified and tip credit was restored. It was a historic victory for workers in the restaurant industry, and it was passed with broad bipartisan support.

In November, residents of the City of Portland will have a question on their ballot for a citywide ordinance to once again eliminate tip credit. Normally, as Executive Director of the Bath Brunswick Regional Chamber, I wouldn’t comment on Portland politics, but this passing in Portland would hurt us all – especially if their next step is to start over. throughout the state.

With my extensive knowledge of this specific policy, it is my responsibility to do what I can to educate citizens on why restaurant workers oppose it. Much like the elimination of tip credit in 2016, the Portland ballot question refuses to ask about the elimination of tip credit as a stand-alone question because on its own it would not pass. Instead, much like the statewide ballot in 2016, this is one part of a multi-part question, and again, the main part of the referendum question is a minimum wage increase (this one being citywide). It’s not an accident.

Referendum questions come from petitions, for which signatures are collected from citizens. This election question is particularly long – even the title is long: “Legislation to eliminate the underpayment, raise the minimum wage and strengthen worker protections”. What did you take away from reading this title? Could you remember that in an hour? Or would you just say, “Oh, it’s the minimum wage issue”? It’s not an accident either.

Did you know that by voting yes to this question, you are voting to do all of the following: raise the minimum wage to $18 citywide, eliminate the tip credit, increase pay each year by indexing the cost of life, eliminating independent contractor status for any delivery service driver “who provides service to or from any location within the city limits, whether or not he has a physical place of business within the city ​​limits” and establish a Fair Labor Practices Director in Portland. The five separate questions form a single list – vote yes and all five pass, vote no and no one does. Proponents of eliminating the tip credit are banking on raising the minimum wage to be popular enough to push through the rest.

For starters, multi-part petition questions should not be allowed. Whenever a governing body considers whether multiple parts of a question can be split, the petitioners’ response is “The people signed the petition because the question is written that way – don’t present it as It would go against people’s wishes.” In reality, a signature collector probably said, “Hey, would you like to sign that petition to raise the minimum wage…signing this just gets it on the ballot.” At least that’s what most of them tell me when they want me to sign their petitions.

And how many of Portland’s 65,000 residents had to sign the petition to present it to the Portland City Council? 1,500 signatories according to the city’s website – less than 2.5% of the population.

So, to recap: an elimination of tip credit, which tip employees overwhelmingly oppose, was put on the ballot because less than 3% of citizens (many of them not in this industry) signed a petition for a question that intentionally has multiple parts that “cannot” be split into separate questions to be taken individually, as they claim it is the “will of the people” even though surprisingly few people have actually considered the five parties and the implications they would have on business before you signed up and probably just signed up for the regular minimum wage increase or “just to get it on the ballot.” Cool. That’s certainly the intention of our founders – less than 3% of people coming up with topics that will fundamentally change how people get paid in an industry that 3% aren’t even a part of. Impressive.

This is not the way we should be making policy. Tipped employees want tip credit.

Over the next two weeks, I’ll be highlighting underhanded tactics used to deceive the public and share other insights such as:
• There is no “low minimum wage”.
• Most servers earn between $20 and $30 per hour.
• Tipped employees are commission salespersons.
• Opponents try to link tipping with slavery to incentivize you (and phrases like “subminimum wage”).
• Most Portland businesses already pay more than minimum wage.
• Several national lobby groups have been funding campaigns to eliminate tip credit in cities for years.
• We will see why tip credit exists and restaurant margins.
• We will disprove the theory that servers will make more money by eliminating tip credit.

Finally, don’t take my word for it: ask your favorite bartender; they want to keep the tip credit. Or read the great opinion piece by Portland’s Joshua Chaisson in the Maine Voices section of the Portland Press Herald which was published on September 6 and titled “Portland Can’t Afford to Eliminate Tip Credit.”

Cory King is the Executive Director of the Regional Chamber of Bath-Brunswick.

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