CEO, New Mexico Restaurant Association
When you took your loved one out this Valentine’s holiday, you likely interacted with cheerful and helpful servers and wait staff. These professionals were there to make your dining experience pleasant and memorable.
At times, they may have even helped coordinate marriage proposals on special holidays like Valentine’s Day. As a result of providing excellent service and possibly acting as photographer with your cellphone to document your special occasion meal, the server earned a tip as part of his or her compensation.
House Bill 31 would change the tipping system we all know and expect. Here is some background information for those of you not familiar with the restaurant service industry:
Tipping in the service industry is how we, in the United States, allow for restaurants to take care of our servers and customers. A server is a sales commission-based person hired by a restaurant. A server makes a lower hourly wage that, when included with tips, equals their take home pay. Tipped employees are guaranteed to earn at least the local minimum wage, and servers typically earn much more.
Census Bureau data report the average hourly wage for a tipped restaurant employee is $13.08, with top earners at $24 an hour or more!
We have data from payroll stubs showing servers at a southern N.M. coffee shop earning a salary range from $13 to $20 per hour. If a server does not earn the local minimum wage, restaurant owners are obligated by law to pay the difference to the server as part of their hourly salary rate. This lower hourly wage allows restaurants to hire more servers, keep costs down and maintain affordable prices.
If the tip credit – lower hourly wage – is removed, restaurants will be forced to raise menu prices drastically to help cover costs or charge an additional service. For example, a small restaurant would see a $166,400 increase in annual payroll if this legislation becomes law.
Raising menu prices has a direct correlation with losing business. Over time, dining in, full-service restaurants will be a luxury only for the wealthy and upper class, squeezing New Mexico families and the elderly into restaurants only offering counter service and kiosks. In effect, the legislation will take servers out of the service industry by making it too expensive to hire or keep servers employed.
Proponents of this measure will tell you that servers are paid $2.13 an hour and that some don’t even make minimum wage. That is simply not the case. A tip credit guarantees the prevailing minimum wage and provides a server with a chance to earn much more.
Don’t fall victim to “tipsplaining” where those who don’t work for tips try to convince you they know better than those who do.
Servers and bartenders are well aware of these effects, and they do not want to lose their income or their jobs as a result.
They are clearly telling New Mexico legislators that they do not want “one fair wage.”
They want to keep the tipping system the way it is, as evidenced by over 2,000 servers who have signed a petition to “Save the Tipping System in New Mexico,” which can be found at saveourtipsnm.org The current tip system works for customers, servers and restaurants. Let’s keep it this way.