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August 7, 2017
Politics & Co.

Grassroots effort played key role in restoring tip credit

Last month's repeal of the section of the state's new minimum wage law dealing with tipped workers has generated lots of nationwide buzz, including a story in The Washington Post, "Maine tried to raise its minimum wage. Restaurant workers didn't want it."

The national attention doesn't surprise Steve Hewins, president and CEO of the Maine Restaurant Association and Maine Innkeepers Association, and Greg Dugal, director of governmental affairs for the restaurant group, who credit a grassroots effort by restaurant workers involving a strong social media campaign as key factors in the successful effort to get lawmakers to repeal the tip credit provisions of the new law.

"We are the first state that ever eliminated the tipped credit through the referendum process and we're the first to restore it legislatively," says Dugal, who has washed dishes, tended bar, waited on tables and staffed buffet lines in addition to having served many years in the role now filled by Hewins.

Vote created confusion

Under the voter-approved minimum wage guidelines that took effect in January, the state's regular hourly minimum wage went from $7.50 to $9. The minimum will increase $1 per year until it reaches $12 in 2020, after which the minimum wage would be adjusted in relation to the consumer price index.

Until being repealed and signed into law on June 22 by Gov. Paul LePage, the tip credit portion of the law was supposed to raise the minimum wage for tipped workers from $3.75 to $5 in 2017, with yearly $1 increases from 2018 to 2024 until their minimum wage was on par with other non-tipped workers. The tip credit rule allowing employers to take a credit of up to 50% of their employees' wages (with the expectation that workers would make that much or more in tips) was supposed to eventually zero out by 2024.

The fundamental problem with the minimum wage law approved by 55% of voters, says Hewins, is that few people understood just how the tip credit rule worked.

"They shouldn't have to know this stuff," adds Dugal. "It should never have been in Question 4 to start with."

Soon after the new minimum wage law took effect in January, restaurant servers and other workers whose wages include tips began seeing a falloff in their tipped income. "People thought the minimum wage for servers was $12," Dugal says, referring to the parity level for tipped workers spelled out in the law for 2024. "Servers were telling us that their customers were asking, 'Should I still tip you?'"

Grassroots and social media the key

Dugal credits Jason Buckwalter, a waiter at a Bangor steakhouse, and Susan Stephenson, co-owner of Pepino's in Bangor, as key organizers, creating a Facebook page for "Restaurant Workers of Maine."

The Facebook group, Dugal says, started out with 15 people. It quickly grew to 5,500 members before its organizers closed its membership because it was starting to get unwieldy.

Social media proved crucial in creating momentum for the restore-the-tip-credit effort, by encouraging servers to contact their elected representatives or speak at the public hearing in favor of restoring the tip credit.

"Once you get everyday people involved, that's who legislators are going to pay attention to when it comes to a vote," Dugal says. "They engaged legislators, both Democrats and Republicans."

In her testimony before the Legislature's Labor, Commerce, Research and Economic Development Committee, Stephenson brought the issue home with a passionate written statement making the point that the tip credit, in her restaurant at least, was not an owner-versus-worker issue.

"Seven members of my front staff have worked at our restaurant for a combined total of 95 years," she told the committee in her testimony. "My restaurant, Pepino's, has been in business for almost 40 years and the staff has stayed because of the job's flexibility and fast-paced nature, the co-workers, the patrons. But ultimately they have stayed because they earn a great living. Not once have I ever had to make up minimum wage for them, because they average $20 or more per hour."

Stephenson summed up: "Owners are not oppressors. We want what is best for our employees. At restaurants happy employees ensure happy guests. Happy guests ensure prosperous and profitable businesses."

Both Dugal and Hewins see a residual benefit from the coalition of restaurant workers and owners who succeeded in restoring the tipped minimum wage. "I think we created a level of trust that wouldn't have existed previously," Hewins says.

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