In Massachusetts this week, state lawmakers heard testimony on a proposed measure that would eliminate the tip credit statewide. If lawmakers don’t act on this proposal, it could end up on the ballot this November.
But tipped servers and bartenders in the Commonwealth say they don’t want the current system to change. A new survey released by the Massachusetts Restaurant Association finds local tipped employees oppose this new proposal and credit the current system as a path to a lucrative livelihood.
The results of the survey showed:
- 86% think the current tipping system works for them.
- 90% believe that if tipped wages are eliminated, tipped employees will earn less.
- 91% say they prefer the current system, with a lower base wage and tips that provide the ability to earn more than the minimum wage.
- 56% of respondents report earning more than $30.00/per hour.
Economic research shows tipped restaurant employees average earnings much higher than the standard minimum wage, and eliminating the tip credit shifts restaurant operations so employees earn fewer tips and less total take-home pay.
This proposal also includes language to change how tips would be distributed among employees in the restaurant. If enacted, the new law would green light restaurant tip pools – which could require tips be shared with non-tipped, non-customer-facing staff who are not paid a tipped wage but rather subject to the hourly minimum wage. Tipped employees surveyed by the association overwhelmingly opposed this practice: 88% oppose mandatory tip pooling.
Tipped employees’ concerns about the impact of the tip credit are based in research spanning decades of anti-tip credit legislation. Miami and Trinity economists estimate eliminating Massachusetts’ tip credit could cost more than 8,000 jobs and more than $29 million in lost employee earnings.
Research from Cornell University also documents that as tipped wages rise (as a result of tip credit elimination), tip percentages fall. States including California and Washington that have eliminated their tip credit have some of the lowest average tipping percentages in the country.
Massachusetts employees rallied against this proposal this week, as other tipped restaurant employees have fought and won to save the tip credit across the country.
Massachusetts lawmakers and voters should pay attention to local employees, and not activists trying to change a system that isn’t broken.