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Job Quality: Eliminate the Subminimum Wage for Tipped Workers

By Jéssica Oliveira, Matahari Women Workers Center

April 1, 2021

Despite spending the better part of a year extolling frontline workers for continuing their work and risking infection amid a global pandemic, little effort has been expended to implement changes to statewide policies that would adequately support and protect this class of workers.

In fact, many service workers and tipped workers continue to earn a subminimum wage that is significantly below the state’s overall minimum wage ($5.55 per hour for tipped workers versus $13.50 per hour for everyone else). While technically employers must guarantee that tipped workers earn at least the full minimum wage when actual tips and wages are combined, this is rarely enforced and has contributed to large pay inequities both within the restaurant industry and across sectors. For instance, tipped workers, two-thirds of whom are women and almost one-third of whom are people of color, are more than three times as likely to live in poverty compared to the average population.

While Massachusetts has been a leader in phasing in a $15 minimum wage by 2023, it still relegates this workforce—the majority women and people of color—to a second tier, continuing a racist legacy of subminimum wages tracing back to slavery. It’s one thing to perform gratitude for essential workers on social media, and another to take the necessary steps to protect them from exploitative wages that have evolved into a public health crisis with the spread of COVID-19. Tipped workers’ median wages are still 40 percent less than those of other workers throughout the state and tipped workers are more than two times as likely to rely on Medicaid.

Recognizing that even prior to the pandemic, restaurant workers earned low wages, received few (if any) benefits, had little financial security and a stifled political voice, Matahari Women Workers’ Center—a grassroots organization in Greater Boston led by women of color and immigrant women workers—decided to lead the call to increase the minimum wage for service and tipped workers to $15 an hour through a partnership with the Biden-Harris–endorsed One Fair Wage campaign.

One Fair Wage (OFW) is a national movement at the intersection of racial, immigrant and gender justice. It acknowledges that the history of subminimum pay for tipped workers is a sequel to slavery that aimed to exploit recently freed people, particularly Black women. Following Emancipation, restaurant owners hired newly freed people to work for tips alone in order to avoid paying them an actual wage. When the first national minimum wage law was signed in 1938, it did not include restaurant workers, a group that continued to be mostly women and Black. Today, Massachusetts is tied with New York for the second largest race and gender wage gap in the country between White men and Black women working in front of the house positions, trailing only Alabama.

Leena Mathew, OFW organizer with Matahari, put into words the impact of implicit bias on pay inequity for working women of color in this sector. “Because of how bias infiltrates the restaurant industry at every level—from hiring to tipping—the lack of regulation functions as segregation in the workplace. There are very few workers of color in the front of the house but there are many in the back of the house. In fine dining institutions especially this divide is clear.”

During the pandemic, the subminimum wage has forced restaurant workers to choose between a barely living wage and their own health. Workers are not only obligated to work in indoor environments for an extended time with people who are eating and talking—a major risk factor for COVID spread—but they are also asked to police the very patrons who determine their pay.

“Restaurants are now operating at full capacity, and servers have to enforce health protocols without proper support. Having a conversation about masks [..] puts you in a strange position with the customer. You have to enforce protocols, even though there are technically no real consequences to the patron, and the server will probably walk away with less money in tips,” commented Ariana Pedroia, a mixed-race 28-year-old Cambridge resident, student, and Matahari member with 10 years of experience in food services. She added that though she experienced a temporary increase in tips when restaurants first reopened last summer, tips have generally dropped 50-70 percent through the pandemic and over 80 percent of workers reported increased hostility over enforcing public health measures.

“It's frustrating because we know these decisions have been made in an effort to save the restaurant but without any consideration of the workers,” Pedroia exclaimed. “Ensuring workers get paid a fair living wage with tips is an essential starting place to bring the service industry into the 21st century. In a time where the industry is working hard to convince Congress their businesses are essential, only a handful of individual restaurants like Juliet and Bon Me have made the effort to ensure their workers’ health is considered essential as well.”

Adding assault to injury, workers in subminimum wage states like Massachusetts are reliant on customer tips to survive and therefore have far less power to reject customer harassment, including sexual harassment, which is often also racist. “The sexual harassment [pre-pandemic] has been bad on many levels from guests, co-workers and management [..] it would make it easier to deal with knowing you aren’t relying on a customer for your livelihood,” disclosed Pedroia.

Foodies, industry workers and the general public can call on legislators to co-sponsor bills H.D. 3462 and S.D.1811, which aim to eliminate the tipped subminimum wage and to raise all workers’ minimum wage to $15 an hour. The seven states that have passed OFW report about half the incidents of sexual harassment as well as higher wages and employment rates, and 27 percent lower poverty rates than in states with a $2.13 wage (federal minimum), especially for women of color. At the same time, reports from these states show that restaurant sales are higher in OFW states than $2.13 wage states and that restaurant growth in OFW states equaled or surpassed states that had a lower tipped minimum wage. Eliminating the subminimum wage could also lead to lower employee turnover rates and boost consumption.

“We must recognize the interconnectedness of our community's problems. The money someone earns determines where they are able to live and the education that they can provide for their families. These problems need to be addressed holistically by policies that work on multiple levels. One Fair Wage is precisely this type of legislation,” declared MA State Representative Brandy Fluker-Oakley, a cosponsor of the OFW bill and featured speaker of Matahari’s MA Women Workers Rising webinar last Friday. She was joined by Boston City Councillor Lydia Edwards, Congresswoman Ayanna Pressley, and Matahari member-leaders and organizers.

While Americans have grown accustomed to this bizarre and discriminatory practice of customers paying workers for their labor rather than employers, this is not how it works in most other places. Months before the COVID-19 pandemic shut down, my partner and I embarked on a three-week foodie fantasy of eating and imbibing our way through Europe. As we walked into The Devil’s Advocate, a Victorian pump house hidden away in Advocate’s Close, we were greeted by a friendly bartender in a black leather apron who made the hour and a half wait for a table seem short. As we closed our tab, I asked our new friend about the tipping culture in Edinburgh and smiled politely and answered definitively: “Tipping will not be turned away, but it isn’t necessary here. Workers are paid a fair wage."

Another world really is possible. We can move beyond symbolic solidarity and toward sincerely honoring the contributions of these workers who have made our way of life possible.

Read more proposals in the Seizing the Moment series.