Nancy Goldman: Increase the minimum wage without penalizing servers


Nancy Goldman

Minnesota is one of only seven states that does not have “tip credit” or Tip Penalty laws. Minnesota minimum wage was last increased in 2007. As the current legislators look to increase our state minimum wage, which is among the lowest in the country, Hospitality Minnesota, the restaurant employers association, is once again trying to find a way to keep from paying that wage to servers and bartenders, using the same arguments that have proven to be untrue in the past.

One member of our union, UNITE HERE Local 17, recently testified at several minimum wage hearings. Here’s what Nicole Hilgendorf, a server and member of the union, told lawmakers:

“I am a server, and have been on and off for the past 8 years. I started serving while enrolled in college in Wisconsin. Because there is ‘tip penalty’ in that state, my hourly wage was $2.33 per hour. I barely received a paycheck from my employer, as my hourly earnings were just enough to cover taxes on my tips. Therefore, any take home income I received was entirely dependent on tips from customers. On busy nights, this did not bother me much, but on slow nights, this was extremely problematic.

“At the end of the month, if I did not earn enough tip money to cover bills and expenses, I had to pick up extra shifts which often resulted in missing classes, breaking plans, or paying my bills late and incurring penalties and fees. Although tipping is culturally enforced, it is subjective and therefore is not guaranteed. I understand that federal law states that if a tipped employee does not earn the minimum wage from hourly plus tips, the business is responsible to ensure that tipped employees receive the minimum wage rate on their paychecks. This would have been useful information for me to have while working in Wisconsin! Unfortunately, I was unaware of this, and I am assuming many other industry workers are as well.

“After college, I moved to Minnesota. My first job was a serving position. I did notice what I thought was an error in the job posting: it said this position was paid $7.25 an hour. I just assumed it was a mistake, but after 2 weeks, I received a paycheck. And not a voided check or a check for 10 cents, but an actual paycheck! I can honestly say for the first time while being employed as a server, I felt like a valued employee.

“Receiving a minimum hourly wage, in addition to tips, has given me a sense of financial stability. I know that no matter what amount I make in tips, I will at least earn enough hourly to cover my rent. That alone has tremendous effects on my well being, as some of my financial stress is diminished.

“I would like to address a misconception that I often hear: most tipped employees are college students or young people trying to make ends meet while working parttime. This is untrue. Although I do work with students and young people, I also work with people who have families to support, as well as workers that have been in the industry for years or decades, and this is their professional career. Tipped employees rarely receive benefits such as health care, Pension or 401K, and sick days. Many tipped employees just do not get sick, or rather, do not get proper health care when sick and show up to work sick, only to prolong their ailment or worse, spread it to others. Paying tipped employees minimum wage at least makes the out-of-pocket costs more manageable when ill.

“In closing, I would like to remind you that minimum wage is not a livable wage. Tipped employees are not wealthy, nor are they greedy in asking for fair compensation. We are just trying to make a living like everyone else.”

– Nancy Goldman is president of UNITE HERE Local 17.

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