Bill to eliminate subminimum wage for tipped workers draws broad support

STATE HOUSE – Rep. Aaron Regunberg and Sen. Gayle Goldin have introduced legislation to raise Rhode Island’s subminimum wage for tipped workers for the first time in nearly 20 years.

The legislation would gradually raise the state’s tipped minimum wage from its current rate of $2.89 per hour until it is in line with Rhode Island’s regular minimum wage by the year 2020. While the base rate of hourly pay would increase, wait staff would still receive tips, as they do in the seven other states that do not have a separate subminimum wage. The bill was introduced with 42 co-sponsors in the House and 21 in the Senate.

“It’s far past time for Rhode Island to take up this issue,” said Representative Regunberg (D-Dist. 4, Providence). “Our state’s two-tiered wage system has left a critical sector of our workforce behind. Rhode Island has the lowest tipped minimum wage in all of New England, and our state’s tipped workers are twice as likely to live in poverty as our non-tipped workers. The last time we raised the tipped subminimum wage, the minimum wage was $4.45 an hour. It’s time for a change.”

“A majority of tipped workers are not teenagers working for pocket change,” said Senator Goldin (D-Dist. 3, Providence). “They are adults, many of whom are women working in the restaurant industry while raising families. The woman serving your sandwich at your favorite lunch spot may rely on food stamps to make sure her own children aren’t going hungry. We know that eliminating the tipped minimum wage leads to smaller wage gaps for women overall and lower poverty rates for these employees. By creating a stable base of earnings, workers will be able to plan for their monthly expenses, like how much they can afford in rent, groceries, and the gas they need to get them to work.”

Recent studies show that the restaurant industry is thriving in states without a lower minimum wage for tipped workers. The seven states without a subminimum wage have higher average restaurant sales per capita and higher average employment growth for tipped workers than states with subminimum wages, yet average menu prices are not higher than in subminimum wage states.

The legislation drew praise from many Rhode Islanders involved in the restaurant industry. “As a full-time server who has been working in the restaurant industry for eight years, I can personally attest to the hardships created by our state's subminimum wage,” said Morgan Ketner, a restaurant server from South Kingstown. “Since I have to rely entirely on tips, I never know how much money I’m going to take home. I can’t count the number of times I’ve driven to my workplace, had a slow shift, and walked out the door with an equivalent of just $5 or $6 per hour for my work. There are thousands of us across the state who are struggling, and I know this legislation would provide some much needed stability for servers statewide.”

“I know how important it is for my businesses to treat my employees right,” said Rob Yaffe, who owns three successful restaurants in Providence and Pawtucket – the Grange, the Garden Grille, and Wild Flour. “A subminimum wage of $2.89 per hour contributes to income inequality, and it's just not right – particularly at restaurants where workers cannot count on a good tip. I’ve run the numbers and I know my businesses could absorb a gradual increase in the tipped minimum wage over the next 3-4 years, starting with an immediate $1.50 raise. It's the right thing to do.”

The bill also garnered support from advocates outside the restaurant industry. “Rhode Island’s tipped minimum wage has not been raised a cent in nearly 20 years. For too long, we have left thousands of hard-working Rhode Islanders behind,” said George Nee, President of the Rhode Island AFL-CIO. “This cannot continue, and I look forward to joining working families from across our state in advocating for this legislation.”

Other supporters stressed the special significance this legislation has for women in Rhode Island. “RI-NOW strongly supports eliminating the subminimum wage for tipped workers, because we know that this is an issue of women's equality,” said Shandi Hanna, President of the Rhode Island chapter of the National Organization for Women. “More than 70 percent of Rhode Island’s tipped workers are women; half of them are mothers, and half of those are single mothers. A $2.89 tipped minimum wage is legislated wage discrimination, and we believe anyone who cares about the gender pay gap should care about this legislation.”

The House bill (2015-H 5364) is co-sponsored by Representatives David A. Bennett (D-Dist. 20, Warwick, Cranston), William W. O’Brien (D-Dist. 54, North Providence), Joseph M. McNamara (D-Dist. 19, Warwick, Cranston) and Grace Diaz (D-Dist 11, Providence). It has been referred to the House Labor Committee.

The Senate bill (2015-S 0291) is co-sponsored by Senators Erin P. Lynch (D-Dist. 31, Warwick, Cranston), William J. Conley Jr. (D-Dist. 18, East Providence, Pawtucket), Cynthia A. Coyne (D-Dist. 32, Barrington, Bristol, East Providence) and Frank a. Ciccone III (D-Dist. 7, Providence, North Providence). It has been referred to the Senate Labor Committee.

For more information, contact:
Daniel Trafford, Publicist
State House Room 20
Providence, RI 02903
(401)222-2457