2014

Wage increase for tipped employees takes effect January 1st

l3wis December 24, 2014 4Comments

­While most would be happy with a $2 an hour raise, it really doesn’t address the bigger issue of employers paying employees fairly. While I supported a minimum wage increase for hourly folks, I didn’t like the portion of the law that doubles tipped employees wages from $2.13 to $4.25.

Why?

It doesn’t address the bigger issue of tipped employees paying non-tipped employees. What most diners don’t realize is that restaurants in South Dakota can force tipped employees to give a portion (10-25%) of their tips to non-tipped employees (bussers, cooks, dishwashers, hosts). Of course no employer really forces you to do this, but they do sucker you into signing an agreement that you will, or they won’t hire you. While a $2 an hour raise will help a lot of full-time servers (even though many restaurants already pay more then $4 an hour to tipped employees) we are still stuck paying other employees from our tips when this should be the business’ responsibility.

I would have liked to seen a provision in the law eliminating the tip share option for tipped employees, forcing employers to pay their non-tipped staff more instead putting it on the backs of their tipped employees.

While I only work about 10 hours a week serving nowadays, when I worked full-time a couple of years ago I tipped out $4,500 in one year (these are tips I EARNED given directly to me from customers I served). In that same period of time, let’s say I was making that extra $2 an hour, that only adds up to $4,160 before taxes.

Eliminating the tip share would be more beneficial to tipped employees then any silly $2 an hour raise.

Furthermore, the media will have a feeding frenzy about how tipped employees are now making double of what they did before (not really), so the unintended consequences will be people tipping less while giving restaurants an excuse to raise meal prices.