Minimum wage laws have mandated a certain level of remuneration for decades. Unfortunately, from the earliest incarnations of those laws, workers were entitled to a minimum gained through wages or through tips. The result is that in tipped occupations, employers are allowed to pay less, often substantially less, than in other fields. Restaurant workers in tipped positions feel the brunt of this in several ways. Some people believe that it is past time to end the tipping exception and maintain one minimum wage for all employees. Several states have already enacted laws to do this.
The law requires employers to make sure that employees are paid at least the minimum wage. If tips are insufficient to cover the difference, employers are supposed to pay the rest. In reality, many employers do not take the necessary steps to make up the difference. The Department of Labor says that there is an 84 percent violation rate when it comes to employers making sure tip earners get at least the full minimum wage.
Another problem associated with tipped positions is that they contribute to an unhealthy work environment. Restaurant workers make up the majority of tip earners in this country. Not coincidentally, the restaurant industry is also the site of the highest rate of sexual harassment of any occupation. Thirty percent of sexual harassment claims nationwide come from females working in the restaurant industry. Women working in restaurants are harassed at a rate five times greater than other industries.
A person who depends on tips to make a living wage is in a tough spot. Many believe they have to put up with sexual harassment in order to keep their jobs. In addition, tipping contributes to racial segregation that is difficult or impossible to counter legally. The $4 per hour gap between what white workers and workers of color make in the restaurant industry is partly based on tipping inequality. Restaurants may be forbidden from refusing to hire someone because they are black, but customers are allowed to tip a black worker badly, or not at all, with impunity.
Source: The Washington Post, “I dare you to read this and still feel good about tipping,” by Roberto A. Ferdman, 18 February 2016