In a highly charged meeting of the state Senate Business, Industry and Jobs Committee Friday (March 27), lawmakers tabled legislation that would allow employers to pay tipped employees below the minimum wage, but indicated it may not be dead in the 2009 session.
Under pressure from the labor movement, Senator Kathy Saltzman, DFL-Woodbury, moved to table her proposal that would deny tipped workers an upcoming 70-cent increase in the minimum wage. Instead, she announced that state officials would “set up a process where we’re going to bring people together to work on this.”
Department of Labor & Industry Commissioner Steve Sviggum, Department of Employment and Economic Development Commissioner Dan McElroy and others will convene meetings with business and union representatives to address the “crisis” facing many bars and restaurants, she said.
Advocates argue Saltzman’s bill is necessary to shield Minnesota’s hospitality industry from the cost of a 70-cent increase in the state’s minimum wage, from $6.55 to $7.25, scheduled for July 24. The legislation would allow employers to pay workers the old minimum wage, but only if they earned an average of $12 per hour in wages and tips during that pay period.
Union officials disagree with the premise of the plan, said Wade Luneburg, legislative director for UNITE HERE Local 17, which represents workers in the Twin Cities hospitality industry.
“We don’t believe that tips are wages,” Luneburg said. “We believe the tips are earned by the servers for their service. The wage is what the employer pays.”
When Saltzman asked whether the parties were willing to meet, Luneburg joined representatives of the Minnesota Restaurant Association and Hospitality Minnesota in saying he would. Local 17, which represents only a fraction of Minnesota’s 265,000 hospitality industry workers, has already made efforts to help business deal with the dramatic effects of the current economic downturn, he said.
“We recognize the challenges in our industry,” Luneburg said. “We do look forward to working with the industry in the next couple weeks to see if there is a solution out there.”
Brad Lehto, representing the Minnesota AFL-CIO, said the state’s largest labor federation is also open to participating in the talks, “but if we’re in the discussion, everything is on the table, (including the fact that) Minnesota’s minimum wage is in the bottom 10 of the nation.”
DFL advocacy of the “tip penalty” legislation, as it is called by unions, caught many in the labor movement by surprise. In the past, Republicans have been the proposal’s chief proponents.
“I’m really disappointed,” said Shar Knutson, president of the St. Paul Regional Labor Federation. “At a time when families are struggling, it doesn’t make sense.”
Minneapolis Regional Labor Federation President Bill McCarthy noted that earlier in the Senate committee meeting, lawmakers heard testimony from Minnesotans who are losing their homes and turning to food shelves to make ends meet.
“I’m surprised a bill like this would come forward at a time when you have all of these problems affecting the working people of Minnesota,” McCarthy said.
Senator Linda Scheid, DFL-Brooklyn Park, expressed disappointment of a different kind, saying she wanted an immediate committee vote on Saltzman’s legislation.
“I think it was really reasonable and generous and we should be voting for it,” Scheid said.
Senator Steve Murphy, DFL-Red Wing, told Saltzman he hoped the discussions between the state, business and labor “get some result before the end of the session.”
Saltzman said, “I don’t want this (tabling of the legislation) to be perceived that we have given up on this issue.”