Fact: Total compensation ensures that tipped employees earn higher than the state minimum wage while also ensuring that heart-of-house workers, who are 70% Latino, are not left behind and with less long-term earning capacity as a result of reduced wage ladders and fewer discretionary dollars for raises. The minimum wage will increase to $10 per hour on January 1, 2016 as mandated under current California law. A total compensation policy will not impact the wage for non-tipped employees, or tipped employees who earn well over the state’s minimum wage.
Myth: Total compensation doesn’t help create income equality for heart-of-house workers.
Fact: Like most businesses, restaurants have a job ladder where wages are increased as employees gain skills and progress from an entry-level position. Restaurants have a finite number of labor dollars. If you increase the wage for entry- level positions at the bottom of that ladder then there will be fewer rungs on the wage ladder for workers as they gain experience. Total compensation avoids this issue by freeing up li mited labor dollars for heart-of-house employees while guaranteeing significantly higher than the minimum wage for tipped workers.
Myth: Total compensation does not allow communities to increase the local minimum wage.
Fact: A total compensation policy empowers communities by giving them local control over the minimum wage. It does not mandate a specific local minimum wage, or preempt in their entirety existing local minimum wage laws. Total compensation would establish a statewide minimum wage rule that applies only to tipped employees that earn significantly more than the minimum wage. A local jurisdiction that disagrees with this rule may “opt out” by passing an ordinance or resolution that rejects this rule for tipped servers.
Myth: There is no way to verify that a server is earning the hourly threshold.
Fact: Because over 90 percent of restaurant transactions take place with a credit or debit card, employers will be able to verify a server’s wages. Employers are responsible for reporting and paying taxes on employees’ tips, so employers already provide a report to the IRS on those numbers.
Myth: Total compensation is sexist – it condones sexual harassment and reduces the pay of female servers.
Fact: The California Restaurant Association has absolutely no tolerance for sexist policies or sexual harassment. California has some of the strictest laws on these issues in the country and the CRA – along with the restaurant industry as a whole – is fully supportive of their enforcemen t. Total compensation would ensure that all tipped workers, regardless of gender, race, age, etc. receive significantly more than the minimum wage. It does not reduce the pay of anyone.
No one should face discrimination in the workplace. Under the curr ent compensation structure, back of house employees – who are 70% Latino – do not receive the same financial benefits as tipped workers. A total compensation policy would help to equalize this discrepancy by allowing limited labor dollars to be allocated to non-tipped employees, benefiting those who need the increase the most.