Management at Side Street Café in Bar Harbor put out these cards explaining the current minimum wage for tipped workers in Maine. ISLANDER PHOTO BY LIZ GRAVES

Dems square off on tip credit fix

BAR HARBOR — In late January, cards appeared on tables and the bar at Side Street Café on Rodick St. with information about Maine’s new minimum wage law.

“Servers did receive a raise!” the cards read. “Your server is now earning $5/hour.”

Manager Shannara Gillman said they decided to create the cards when, “in the first few weeks of January, some of our servers were seeing a decrease in their tips over what they made last January.”

They hoped the cards would help explain the change to state law following the successful Question 4 referendum last year that raised the minimum wage in Maine.

“We wanted to help people figure out what the landscape looks like and what the future options are,” she said. “It has sparked some conversations for sure.”

The tipped wage is scheduled to increase by $1 per hour every year until it reaches the regular minimum wage. Restaurant owners worry that the gradual increase in base pay would force them to raise prices and patrons would tip less.

Mount Desert Island’s state senator, Brian Langley (R-Hancock), and Rep. Brian Hubbell (D-Bar Harbor) both have signed on as co-sponsors of a bill in the current legislative session that would undo part of the new minimum wage law and reinstate the “tip credit.”

The tip credit is the difference an employer is required to make up in the event a service employee, like a server or bartender, earns less than the standard minimum wage of $9 per hour, averaged over a work shift.

The language of Question 4 did not eliminate the tip credit immediately, but it raises the base pay for these workers one dollar per year until it matches the regular minimum wage. Once the two wages match, several years down the road, the credit would be eliminated as there would be no difference to make up.

Langley and Hubbell’s tip credit bill, LD 702, is one of several proposed that would make changes to the new law. It removes the language requiring an annual increase in base pay. Proponents of the change argue that the tip credit system meets the same goal, which is to ensure workers make at least the minimum wage.

“I am enthusiastic about the minimum wage increase for servers,” Hubbell said in a statement. “With or without the tipped wage credit, they are still guaranteed the same increase to $12/hr minimum as everyone else – even on days when they don’t reach that through tips. That’s good for servers, and its good for the state.”

Hubbell said many of his constituents who are servers and restaurant owners lobbied him to support the competing minimum wage measure brought by the Maine State Chamber of Commerce last year. He said he could not support the chamber proposal, “because I understood that was an effort to derail the overall minimum wage increase.

“In return, I told them that, presuming Question 4 passed, I would support a separate bill just on the tipped wage credit. I said that publicly at the time, and I am just keeping my word.”

Rep. Walter Kumiega (D-Deer Isle), whose district includes Southwest Harbor, Tremont, Swans Island and the Cranberry Isles, said Tuesday he’s “not sold that we need to fully restore the tip credit.”

“You hear about servers making $20-$30 an hour, but not everybody is in that situation,” he said. He’s concerned about enforcement of the tip credit – the Maine Department of Labor only investigates employers for not paying the credit when there’s a complaint, and employees might be worried about losing their jobs if they complain.

“I’m going to wait and see how the committee deals with all these issues,” he said. The bill has been referred to the Committee on Labor, Commerce, Research and Economic Development.

The Maine People’s Alliance (MPA) was a major force in passage of the referendum and is now organizing against LD 702 and other bills proposing changes to the law.

“We think that it is very unfortunate that some legislators and Gov. LePage are trying to undo the will of the voters,” MPA spokesman Mike Tipping said.

The group sent an email to its members Monday asking them to contact the eight Democratic legislators, including Hubbell, who signed on as cosponsors.

“Legislators are hearing from restaurant owners,” the email from MPA Associate Director Amy Halsted says, “organized by the powerful state and national restaurant lobby, and even from some restaurant workers who fear this will affect their tips – even though years of data in the seven other states that have one fair wage show that tipping has not declined at all.”

The seven states that require the full minimum wage for servers are Alaska, California, Nevada, Oregon, Washington, Montana and Minnesota.

“I am sorry that MPA has picked this as their battle,” Hubbell said this week. “They should be proud of the overall success of Question 4, which, with the overall wage increase, really makes things better for Maine. It bothers me that now they seem to be at odds with the very people for whom they are nominally advocating.”

Reporter Jacqueline Weaver contributed to this story.

CORRECTION: An earlier version of this story misspelled Gillman’s name.

Liz Graves

Liz Graves

Reporter at Mount Desert Islander
Former Islander reporter and editor Liz Graves grew up in California and came to Maine as a schooner sailor.

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