A couple of weeks ago, in a column titled “I can’t believe tip credit elimination is back,” I laid out some initial thoughts and some history about the often-misunderstood tip credit. The tip credit is a payroll policy that has been utilized for decades, and tipped employees — primarily restaurant servers and bartenders — prefer it (in one industry survey, 97% of tipped employees said it’s how they like to be paid).
Maine’s tip credit was eliminated by referendum at the ballot box in 2016 against the wishes of the vast majority of tipped employees in our state. Part of the reason for its elimination was because it was one part of a three-part question, and another part of that referendum question was increasing statewide minimum wage. Once it passed, servers saw effects immediately and rallied to get it reinstated. This led to a 14-hour committee meeting in April 2017 where hundreds of servers testified, and the tip credit got restored. It was an historic victory for restaurant industry employees, and it passed with broad, bipartisan support.
This November, residents of the City of Portland will have a question on their ballot for a city-wide ordinance to eliminate the tip credit once again. Typically, as the Bath-Brunswick Regional Chamber executive director, I wouldn’t comment on Portland politics, but this passing in Portland would hurt us all — especially if their next step is to go statewide with it again.
With my deep knowledge about this specific policy, it’s my responsibility to do what I can to inform citizens on why restaurant workers oppose this. Much like the tip credit elimination in 2016, the Portland ballot question refuses to ask about tip credit elimination as a separate stand-alone question, because on its own, it wouldn’t pass. Instead, just like the statewide ballot in 2016, it is one part of a multi-part question, and once again, the lead part of the referendum question is a minimum wage increase (this one being citywide). That’s not an accident.
The referendum questions come from petitions, for which signatures are gathered from citizens. This ballot question is particularly long — even the title is long: “An Act to Eliminate the Sub-Minimum Wage, Increase the Minimum Wage and Strengthen Protections for Workers.” What did you get from reading that title? Could you remember it an hour from now? Or would you just say, “Oh, it’s the minimum wage question”? That’s not an accident, either.
Did you know that by voting yes on this question you’re voting to do all of the following: increase the minimum wage to $18 citywide, eliminate the tip credit, increase the wage annually by cost-of-living indexing, eliminate independent contractor status for any driver of delivery service “that offers services to or from any location within the City Limits regardless of whether it has a physical place of business within the City Limits” and establish a director of fair labor practices in Portland. All five separate issues are a single slate — vote yes and all five pass, vote no and none do. Proponents of eliminating the tip credit are banking on a raise in minimum wage to be popular enough to carry the rest through.
For starters, multi-part petition questions should not be allowed. Every time a governing body considers whether the multiple parts of a question can be split up, the response from the petition submitters is “The people signed the petition because the question is written this way — to not present it like this would go against the will of the people.” In reality, some signature gatherer likely said, “Hey, would you like to sign this petition to raise the minimum wage … signing this just gets it on the ballot.” At least that’s what most of them say to me when they want me to sign their petitions.
And how many of the 65,000 Portland residents needed to sign the petition to get it before the Portland City Council? 1,500 signors according to the city’s website — or less than 2.5% of the population.
So to recap: A tip credit elimination, that tipped employees are overwhelmingly against, got put on the ballot because less than 3% of the citizens (many who are not in that industry) signed a petition for a question which intentionally has multiple parts that “can’t” be split into separate questions to be taken individually, because they claim it’s the “will of the people” even though shockingly few people actually considered all five parts and the implications they would have on businesses before signing and likely just signed for the regular minimum wage increase or “just to get it on the ballot.” Cool. That’s definitely what our founders intended — less than 3% of the people bringing forward topics that will fundamentally change how people get paid in an industry that 3% isn’t even a part of. Awesome.
This is not how we should be making policy. Tipped employees want the tip credit.
Over the next two weeks, I’ll highlight the devious tactics being used to mislead the public and share other bits of knowledge like:
• There is no such thing as a “sub-minimum wage.”
• Most servers make $20-$30-plus per hour.
• Tipped employees are commission salespeople.
• Opponents try to link tips to slavery to incite you (and phrases like “sub-minimum wage”).
• Most businesses in Portland already pay more than the minimum wage.
• Several national lobbying groups fund tip credit elimination campaigns in cities and have been for years.
• We’ll look at why the tip credit exists and restaurant margins.
• We’ll disprove the theory that servers will make more money by eliminating the tip credit.
Lastly, don’t take my word for it — ask your favorite bartender; they want to keep the tip credit. Or read Portland’s own Joshua Chaisson’s great opinion piece in the Maine Voices section of the Portland Press Herald that ran Sept. 6 titled, “Portland cannot afford to eliminate the tip credit.”
Cory King is the executive director of the Bath-Brunswick Regional Chamber.
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