In late March I got to spend a night in a motel in Eugene, courtesy of a blown transmission in a motorhome. I hoped that the guys doing the hard, highly skilled work were being well enough paid to take some care with something I would have to depend on. Dinner for 3 at the motel restaraunt was about $120, and we were very well looked after for a couple hours. I expected a chance to relax after a very trying day and to eat something nice and to be treated as though we counted for something, and we were. A $30 tip was an easy exchange for the service and it was certainly intended to improve on the wage the waitress was paid, it was intended to pay for the consideration and enjoyment we recieved, not to line the employer's pocket. As a rough calculation our table cost the employer 30 min wait time, or about $3.75 $3.75 out of $120 meal. Yes, I would seriously resent my tip subsidizing that cost, and I would expect my service to reflect that kind of subsidization. It is a highly skilled job to create an atmosphere where a customer is happy with a $120 bill for a meal for 3.

The exemption from the minimum wage for employees is conceptually the same as treating the employee as an independent contractor. It is as naked as charging a nude dancer a stage fee for the opportunity to bring in customers to the house so that, in some circumstances, the gamblers will get giddy on alcohol and girls and then drop their cash into poker machines.

Now does anyone have sympathy for the girl that will strip in a bar that has video poker machines? What if that girl gets 15 bucks (before her stage fee and before, in some cases, paying a driver) because she got a bad shift while the patrons have crammed in perhaps 500 to a 1000 dollars into the video poker machines (net after payouts) during that same time period.

Why not demand then that any worker that gets tips, either for dancing or for merely smiling, should be treated as an independent contractor? That is the essence of the distinction based on tips, is it not? Once the tips no-tips break is made then, conceptually, there is no limit to the scope of differentiation to be made by a future legislature; perhaps saying that a tipped employee is an independent contractor from whom a fee can be charged. Do not be underestimate the conceptual significance by the distraction of the meager few cents difference in the current proposed minimum wage bills between tipped and non-tipped employee. As we all know, from so many past acts of the legislature, once they create a distinct economic class they can then can go hog wild and treat them even more differently for any damned reason they like. All the court looks for is any ad hoc rational permissible reason for the class distinction then they put on full blinders to all manner of other differential treatment.

(For example) The savings of a public employee can be topped off with a shower of legislative gifts via buy in right to years of credit for work years never performed, whatever, to adjust the final average salary calculation upwards; disproportionately more profitably for a tier-one employee than for a tier-thee employee. There is no rhyme or reason other than political heft of the advocate, because the courts plead ignorance to proper recognition of the constitutional equal privileges and immunities clause in the context of economic regulation. Since when is a gift not a gift, come on folks?

Tips are just one factor to consider when distinguishing between an independent contractor and an employee. Slip in a poison pill into this bill by saying that strippers (and others), while retaining the right to be considered independent contractors, must nevertheless be treated no worse off for hours appearing than any other tipped employee for purposes of the minimum wage law. Conceptually, make the house have to cough up a minimum tip to the independent contractor stripper, rather than charge a stage fee, for the opportunity to provide a venue for nude attractions at places that offer video poker machines. Now that ought to slice off the moralist religious right folks that are lined up with the ORA. They might thereby have to acknowledge that there be girls who go naked a few feet away from the video poker machines and draw in customers but get no respect.

To summarize, extend the minimum wage protections to tipped dancers without enhancing the bar's right to control the dancer (key to the the independent contractor determination) but only for bars that offer video poker. It just does not seem fair for the OEA to claim any of the video poker profits that are significantly enhanced by the presence of naked ladies that often make less than minimum wage. You be the moral judge, not of the nakedness but of the economic morality of the legislative allocation of cash from video poker gambling houses where the naked ladies are important but get no recognition by the legislature. Heaven forbid, the religious right might have to acknowledge that there be naked ladies prancing nearby so many video poker terminals, often competing for the same wad of cash from a customer. If you want to make some bar owners livid, now this will do it. Heck it might even minimize some of the incentive of a girl that is predisposed to dance to not cross over to engage in side jobs negotiated right next to the video poker machines. Heck, it might make some bars choose between dancers or video poker, but not both. This ain't, of course, about regulating dancing, just minimum wage where there are tips and video poker, mind you and thus will survive legal attack from all sides.

Ah, yet another rant against HB 2409.

Well, I was all set to offer another defense of the bill, but after carefully considering both Steven's post and the latest comment from Doretta in the previous exhaustive thread on this topic, I had a BlueOregon-induced epiphany.

HB2409 is a pretty terrible bill, after all. I can not in good conscience promote it, as this would be a logically inconsistent position for me to take.

What changed my mind?

Well, as Doretta quite rightly pointed out, the mechanism in HB2409 would establish a separate rate for tip workers which, while extremely unlikely, could conceivably fall below the minimum rate for non tip workers in as little as one year, and would grow more likely to fall below the minimum rate over time. And Steven stresses the excellent point that nobody should get special treatment under our minimum wage laws. I am now convinced that any change to the minimum wage law that would establish different minimum rates for different types of workers would be unjust, regardless of the intent of such a change.

So HB2409 is a bad bill because it establishs two separate rates. And it's a bad bill for allowing the continued inequity of our current minimum wage structure via an incredibly weak compromise (i.e., that small but gradually increasing separation of rates) towards a genuine tip credit. Obviously a 20-30 cent per year phase-in over the next few years of what is effectively a tip credit (without actually being a tip credit) does not really address the fairness issue at all and could end up reversing the current situation to hurt some tip workers in the future while continuing to benefit others.

You see, I do think that the minimum wage, whatever it is, should apply equally to all Oregonians. But it doesn't today. By law, and by definition, any worker who earns any amount in tips enjoys a higher legal guarantee of earnings level than any other worker in the state. There aren't just two minimum rates, there are essentially an infinite number of rates, with each tip earner setting his or her own personal minimum wage based on the tips he or she is able to receive. This is clearly unfair to all non-tip workers. It is a statement of public policy that an hour of a tip worker's labor has inherently more value than an hour of a non-tip worker's labor (as determined by the state-mandated minimum earning for that hour), which is blatantly discriminatory.

Thus I will urge my house representative not to support HB2409, and instead to develop legislation that will actually bring more fairness to Oregon's minimum wage laws by establishing a tip credit towards a single standard real minimum wage rate in Oregon. Now, just to make sure we all understand what is meant by a "tip credit", this is a portion of an employee's tip income which may be credited towards meeting the minimum wage. It is critical to understand the following points: under no circumstances will an employee have to surrender any tip income to his or her employer; under no circumstances will an employee earn less than the minimum wage; if an employee earns less in tip income than the tip credit amount, the employer must still make up the difference to meet the minimum wage level.

I propose using one of the following five calculation methods to determine the tip credit allowed under Oregon law:

1. Tip credit equal to Oregon's minimum wage (currently $7.25)
2. Tip credit equal to the difference between Oregon's minimum wage and the minimum cash wage required under FLSA (currently $5.12)
3. Tip credit equal to the same percentage of Oregon's minimum wage as the federal tip credit's percentage of federal minimum wage (this would currently equal $4.25)
4. Tip credit equal to the dollar amount of tip credit allowed under FLSA (currently $3.02)
5. Tip credit equal to the difference between Oregon's minimum wage and the federal minimum wage (this would currently equal $2.10)

Now, as a purist on the whole fairness thing, I would of course push for calculation method #1 which would treat all Oregonians exactly the same and is therefore absolutely fair. But as a realist, I know that some sort of compromise is in order (and granting 100% tip credit may not be legal under FLSA anyhow), so I would certainly push for these calculation methods in the order they were listed, from largest credit to smallest (thus from most fair to least fair).

Granted, any of these changes would actually result in a drop in earnings for tip workers, whereas HB2409 would not. And the difference under any of these calculation methods in the first year would be an order of magnitude more severe than the simple lack of an inflation increase that HB2409 would impose. But after all, if it is important to have a fair application of the law for everybody (and I do believe that it is) then HB2409 just doesn't do the trick. It would create an even more unfair system by setting up three classes of workers instead of the current two:

1. Those who earn tips but not enough to make up the difference between $7.25 and the "standard" minimum wage legally given a lower earnings guarantee than everyone else);
2. Those who do not earn tips at all, or earn exactly enough in tips to make up the difference between $7.25 and the minimum wage (given the "standard" earnings guarantee); and
3. Those who earn enough in tips to more than make up the difference between $7.25 and the minimum wage (legally given a higher earnings guarantee than everyone else).

Now, since I too am discarding HB2409 I need not go into the various errors and inaccuracies regarding that bill which Steven presented in his post. My alternative plan has nothing to do with HB2409 but would in fact set up a more fair minimum wage law for our state, as Steven expects, and would provide a single minimum rate for all workers, which Doretta and Steven both expect.

Oh, I know that nobody on this site will care much for this plan. I can imagine the excoriation that is to come. But I do sincerely appreciate the opportunity to consider the alternative viewpoints here at BlueOregon. By challenging my original views, and causing me to think even harder, you have genuinely influenced me to change my mind on an important public policy issue. Thanks for the help!

You see, I do think that the minimum wage, whatever it is, should apply equally to all Oregonians. But it doesn't today. By law, and by definition, any worker who earns any amount in tips enjoys a higher legal guarantee of earnings level than any other worker in the state.

Tips hold no guarantee of any earnings. On a slow shift tips decline. When too many front-end staff are schedule tips decline. When (to reference an old stereotype among wait staff) a French woman walks in the door tips decline.

From there you go on to extend these fictitious guaranteed tip levels and project how you can hijack them, in the interest of fairness.

Tip embezzlement (it isn't a credit, look it up) is never "fair." I won't silently watch you whitewash embezzlement. Tips are a private gift from one person to another. The restaurant owner is not being invited to join in the action.

Steven, pay attention:

If you receive a tip, that is considered "earnings".

It must be reported to the IRS.

You must pay taxes on your tip income.

Therefore, by definition, if you receive tips in addition to the $7.25/hour that your employer must currently pay, you have earned more than $7.25/hour.

Now, I never said that tips were guaranteed. They are of course variable as you pointed out.

But again, BY DEFINITION, under our current law if you have received tips in addition to your employer-paid $7.25/hour, you have been legally guaranteed to earn more than the $7.25/hour that all other (non-tip-earning) employees in the state have been legally guaranteed to earn. We don't know how much more, because as you say it's variable. It'll change from person to person, it'll change for one person from week to week. The amount is not guaranteed, but by definition it's greater than zero, otherwise you wouldn't be a "tip earner". The guarantee is that you'll earn something more than $7.25. There's nothing remotely "fictitious" about that.

Let's go over this one more time.

A person who does not earn tips, is legally guaranteed to earn a minimum of $7.25/hour.

A person who DOES earn tips, is legally guaranteed to earn a minimum of $7.25/hour in addition to any tip income.

In addition to.

IN ADDITION TO.

Hence, tip earners are currently legally guaranteed something more than $7.25/hour while others are not. How exactly is that equal protection under the law?

Tips are not a private "gift" from the customer to the employee, because they are given in exchange for something. A gift would be me wandering by a sidewalk cafe, walking up to the waiter there, handing him $5, then leaving. He then would not need to claim that $5 on his taxes. A tip would be me paying $5 to the waiter for actually waiting on me, i.e., providing a service. That $5 does need to be reported. See the difference?

Look up the word "embezzlement" sometime, my friend. With a tip credit, the tips are not appropriated for the use of the owner. They are given to the employee by the customer, and remain with the employee for the employee's use. Period. That is not embezzlement.

But Steven, if a worker meets the legal definition of a tip earner, then they are making more than minimum wage, they are making minimum wage+tips. However, I don't agree with David that this consitutes unequal legal protection for workers. Tips are a custom, they have no legal underpinnings. Yes it is "unfair" that a foodserver gets tips and the kid who bags your groceries and the cook and dishwasher don't, but that isn't a result of the law, it is a result of the custom. I don't think this is a legal problem and I don't think it should be "solved" by a legal change.

And just as a personal opinion (read:emotional reaction devoid of reason) I don't like the idea that the tips I choose to give to servers become money that the employers don't have to pay/take out of the servers' paychecks.

Shari says:"The minimum wage is (or should be) the minimum that an employer pays to the worker."

That isn't a given. There are people that think that the minimum wage should be the least the worker can earn, not the lowest their wages can be. I don't agree with it because I don't like the results, but it is a logically consistant stance to take. IF the goal of the state is to ensure a minimum income THEN the state shouldn't care if that income comes from the employer or tips. I care though. I'm just saying we need a better reason, that reasonable people can disagree that the state should be regulating the minimum wage an employer can pay an employee.

Oh, man. I'm sorry, that was an unintentional transcription error. Substitute Kari where it says Shari, and don't read anything into it.

Phriedom has effectively backed up a couple of points I was trying to make. I'm glad somebody understands my argument even if they don't agree with it. <nobr>;-)</nobr>

However, I want to make it clear that I don't think it's unfair for some workers to earn tips and others not to earn tips. I have no problem with that at all. That's not the unequal protection that I'm talking about.

I'm talking about the law failing to recognize that tip income when determining whether the employee has received the protection of a minimum wage guarantee. That to me is unfair.

Kari, the question of the real purpose of the minimum wage came up in that other discussion thread, and Phriedom has also framed that question quite nicely. Either the minimum wage is a minimum burden on the employer, or a minimum benefit to the employee, or some combination thereof.

You come down entirely on the side of "burden on the employer". But I'm afraid current Oregon law notwithstanding, the national consensus disagrees strongly with you. The federal law and 43 state laws come down on the side of "combination thereof", with most such laws allowing for quite a large portion of the minimum wage to be credited with tip income (more than 58% of the federal minimum wage of $5.15/hr is allowed to come from tip income not paid directly by the employer).

So yeah, we can disagree on that point certainly. Oregon law is currently on your side. That's why I think the law needs to be changed to fall more in line with nationally recognized norms.

And tips, even though they are extra and optional and all that, are still taxed just like regular wages. So why shouldn't they be "counted like regular wages"? Or do you contend that tip income should be tax-free as well?

By the way, ORS 653.015:

653.015 Statement of policy. It is declared to be the policy of the State of Oregon to establish minimum wage standards for workers at levels consistent with their health, efficiency and general well-being.

Nothing there about the policy being to make employers pay a minimum. It's entirely about the benefit to the employee and not at all about the obligation of the employer.

I'm just sayin'....

Kari, fair enough. I understand your point of view.

You don't think anybody's time is worth less than $7.25 an hour. Under my plan, nobody would get less than $7.25/hour. Heck, we're practically in agreement already!!! <nobr>;-)</nobr>

Ah, but for that pesky detail of to whom that hour is worth $7.25...

"By law, and by definition, any worker who earns any amount in tips enjoys a higher legal guarantee of earnings level than any other worker in the state."

ORS 653.015 is a non-sequitor. The law, as it reads, clearly outlines the employer's obligation to pay that full wage on an hourly basis.

The argument to justify a change to that law has not demonstrated a greater good. Why should we seek to reduce folks to this minimum wage level? All the principles of capitalism clearly support the idea that tips offer an incentive for building and selling better service. What possible justification than is there to steal tips from employees?

The bottom line is that if you dock an employee's hourly wage because he/she receives tips, you are effectively stealing those tips. This is the cold , visceral reality of the situation. I believe folks can recognize it as wrong in their gut.

You can whitewash it or talk around it, but the only distinction is the words you are using to justify it. The stink is the same.

Heh. Yeah, I know this is a losing battle... but at least as long as we're talking, hopefully we're still learning...

Steven, the greater good that demands this change to the law, is equality and justice for all Oregon workers, and special treatment for none. I thought those were principles that you supported, based on your original post. I understand that you don't see my point of view, even though I have quite clearly demonstrated why I think this change represents equality and justice and an end to special treatment of tip earners. My position is every bit as principled as yours, whether you understand it to be so or not.

No minimum wage law has ever forced an employer to cut employee wages. My proposed changes would not "seek to reduce folks to this minimum wage" (though it's interesting by your wording that you acknowledge they are not currently at the minimum wage...) If employers wish to continue to pay employees $7.25/hr (or more) plus tips, more power to them. Nothing wrong with that at all.

My citation of the ORS was not a non-sequitur, it was used to directly bolster my immediately preceding post that the point of the minimum wage law is to guarantee a benefit to the employee rather than guarantee an obligation of the employer. I have already conceded that current Oregon law places that burden entirely on the employer, hence the need for my proposed change so that the rest of the law fits in line with the actual stated policy of ORS 653.015. Perhaps you should propose a change to the statement of policy to make it clear that the law is intended to be a burden on the employer instead.

Stealing tips, that's fantastic. So, if I happen to pay my wait staff say $9/hr initially, and for whatever reason I later reduce that wage to $8.50/hr (still well above the minimum wage), does that mean that I'm now stealing their tips?

Perhaps you'll say yes. If so, I say you're wrong. And we're obviously not gonna see eye to eye on this one.

Or gut to gut. <nobr>;-)</nobr>

David,

Take a tipped worker that gets 12/hour in tips. This is enough for them to exceed the minimum wage and to cover FICA, the employers side too.

Your base argument would say that this worker has more than met the minimum and thus could not demand a single dime from the employer. While the bills under consideration only knock off a few pennies the legal issues, regarding the distinction based on tips, would apply with equal force whether the adjustment is a penny or the complete minimum wage for non-tipped workers.

If you want analytical clarity, you can have it swinging in your face for a buck a song, man.

The 30 dollar per month peg is a legislatively determined evidentially thing to make a conclusive finding of whether a position is tipped or not-tipped. Gas station attendants could likely meet that hurdle. This evidentiary thing is like that of blowing .08 in the breathalyzer; which is not a perfect test for impairment of driving ability. The point of controversy in the driving case is the point at which someone becomes impaired; anything higher is just not even necessary for obtaining a conviction. The point of controversy for tips is only arbitrarily pegged to 30 dollars in tips, and coincides with a certain reduction in the minimum wage. Your argument, though, would support any new arbitrary dollar per month figure and some alternative corresponding reduction in minimum wage. Your argument would support a scalable calculation based on actual tips too, all the way to zero pay from the employer. Likewise, it would support a position where the employer could charge a stage fee pegged to assure that a tipped worker gets no more than the minimum wage.

Your argument, for the sake of argument, is not saved by the mere happenstance that the currently selected dividing point is just a mere 30 dollars per month and only a nominal reduction the minimum wage. You are free to distinguish between a scaled measure that fully reflects actual tips earned from the arbitrary 30 dollar peg in the proposed legislation. You cannot do so for it is impossible given your expressed understanding that the total cash in hand of the worker is your criteria.

Thus the naked girls paying a stage fee fits your argument to a tee, my good man. You have perhaps been seduced into taking the wrong side, in your argument, only because the minor adjustment in the minimum wage differential was so low, at least low today. Tomorrow is another day and we might yet hear the full blown argument for scaling down wages to fully accommodate actual tips. Lets talk clarity of argument shall we; naked man. Lets talk naked girls paying stage fees and whether you think that the receipt of tips should perhaps convert each non-naked-tipped-worker into an independent contractor, just like the naked girls? What then is left of the minimum wage law if it is simply inapplicable to any position that involves significant tips. The scope is so broad as to undermine the entire minimum wage for all, at least this is the obvious conclusion to draw from your argument.

(If you want to get back to a point where there is no minimum wage law then it would certainly be necessary, necessary to maintaining mutuality of bargaining power, to once again get back to talking labor rights, which I have said would net greater actual pay amounts than that in the current minimum wage bills.)

Do you wish the minimum wage law to become a maximum wage law? That is the outer limit of your argument. You are only saved from this extreme by the meager reduction in the bills. Why do you think the reduction is so meager, while your argument is so expansive?

the greater good that demands this change to the law, is equality and justice for all Oregon workers, and special treatment for none.

This is a manipulative use of the word justice. You assert that untipped employees experience injustice. You have not shown that this is unjust, however.

your origional argument in this thread:

There aren't just two minimum rates, there are essentially an infinite number of rates, with each tip earner setting his or her own personal minimum wage based on the tips he or she is able to receive. This is clearly unfair to all non-tip workers.

You are not using accurate language, and you draw false equivalencies based on that misuse. Everyone, including tipped earners, have the same minimum legal wage in Oregon, though they won't if you get your way. Any wage higher than the minimum wage is, by definition, not a minimum wage. Tips are included in earnings. Wages are included in earnings. Yet tips are not wages. On your IRS Form-W2 "earnings" are defined by the IRS as "wages, tips, and other compensation." Earnings are one possible form of income. Other sources of income include but are not limited to: interest income, dividend income, capital gains income, gaming income, and gift income. Minimum wage employees who receive tips are still paid the exact same minimum wage.

When you stop abusing the language, it looks like you are claiming that: there are essentially an infinite number of earnings rates, with each worker setting his or her own earnings based on the income streams he or she is able to receive. How is this unfair? That sounds like the capitalist dream to me.

I would like to see ORS 653.015 changed to make a meaningful and measurable statement of intent. As it stands, it is nothing more than puffery.

Your $8.50/hr issue is a strawman argument. When you change the conditions by bringing the reduced hourly compensation above minimum wage, you are paying more than minimum wage. Obvious, but no one needs to pass special legislation to allow you to it.

Hey David, either you're a liar or a shill. Have you ever worked for tips? Ever heard of "tip sharing"? Care to guess what percentage of tipped employees are forced by their employers to "share" those tips with other employees?

David,

Today is the day that the lottery commission meets to determine how much the OEA will share with retailers to hustle up a bunch of dancers, who rely only upon tips, to keep the new line games busy.

If you need empirical evidence to prove the above then we have a big failure to communicate. It would take a much larger effort of creative evidence and a follow-up propaganda campaign to disprove such a link.

I could think of no better test than to impose a minimum-wage demand upon retailers to cover the currently free dancers at the establishments that offer state lottery games. But that minimum wage demand should not be an excuse to take away their right to keep all their tips that would otherwise get crammed into the machines by the patrons.

The OEA is the dancing pimp here, lets not sugar coat it with some bland academic debate as if we were all a bunch of blind mice. The OEA wants 5 times the money that the retailer gets, rather than merely 3 times the retailers' take. Lets not make any mistake as to who is at the top of this food chain shall we; and who is at the bottom.

Hey everyone, sorry in advance for the length of this comment, but I figured better one really big one than three kinda big ones... and thanks, sincerely, to those who actually take the time to read this stuff. <nobr> :-D</nobr>

Ron: You certainly have a unique prose style, man. Hard to follow along sometimes, but I'm trying...

I don't know what your hangup is with strippers and the lottery. I've seen your references to them in a couple of threads now. Strippers tend to be found in bars; the lottery tends to be found in bars; for that matter, alcohol and cigarettes tend to be found in bars, too. There are all kinds of competing uses for that dollar in your pocket when you walk in the door. What exactly is your point?

Well, other than you think the OEA is "pimping" strippers in Oregon. But there are a whole lot more venues for the lottery than there are strip clubs in the state. And I tell you what, every time I walk into a strip club, playing video poker is about the furthest thing from my mind. I've got much better uses for my money and time there. Speaking of "not for investment purposes..." <nobr> ;-) </nobr>

As to your remarks apparently about HB2409, as I stated to begin with in this thread, I no longer support that bill. Instead I offered alternatives that would implement real tip credits as a starting point for discussion. The "pure" implications of my philosophy would allow for 100% of tip income to be applied toward the minimum wage; however as a practical matter I've offered four other compromise plans which would fit more in line with national norms. Hey, you can't always get exactly what you want, but you can get closer to that goal, right?

You've totally lost me as regards how what I've proposed becomes a maximum wage law instead of a minimum wage law. And again, I'm not arguing the merits of the current bills before the Legislature. I've laid out my rationale for what our minimum wage law should be, and offered some specific options for implementing that.

Ken: To address your questions first, no I have never worked for tips. Yes, I am familiar with "tip sharing". No, I don't see how either question is particularly relevant. If I've left a $5 tip and you have to share $2 of that with the other employees, then you've earned $3 in tip income. Your employer has received $0 of your tip income. What exactly is your point there?

Unless you know of some situations where employers actually do take a share of tips received. I've never heard of that, but that doesn't mean it doesn't happen. Enlighten me. Of course, while I would certainly sympathize with the employee in such a situation, I still don't see how that would change anything. Whatever tips you actually keep, that's what would be subject to a tip credit. And employers who follow the minimums of the law but abuse their employees will find it difficult to retain those employees, thus market pressures will act to regulate such abuse. Assuming that employers may now legally take any portion of an employee's tips (I don't know if that's true), they'd be free to take all of your tips now since they've still got to pay $7.25/hr anyway. But that doesn't happen in any widespread way that I know of. Why? Either there's already a legal barrier to doing so (which would not be affected by a tip credit) or there are non-legal, practical (market) checks in place to prevent it from happening, which also would not be affected by a tip credit.

Now, to address your accusations.

I'm not a liar or a shill. Of course, that's exactly what you'd expect a lying shill to say, so that doesn't mean much, does it? So let me just offer you this: assuming for a moment that I am a shill, would that have any relevance at all to the validity (or lack thereof) of my arguments? The argument stands alone regardless of the messenger, for you to agree with or not on its merits. So whether I am a shill or not is simply immaterial.

The liar thing, though, is easy enough to show. All you have to do is demonstrate for us here that I have made some false statement. Shouldn't be too hard, if I have. Point it out, be specific, and offer the true statement to counter my false one. That's what I do when I see other people making false statements, using bogus statistics, etc. I mean, deep down I'm an optimist so I simply assume when that happens that they were merely mistaken and not intentionally trying to deceive anyone. But to each his own. I certainly try to be truthful, though I can't guarantee that I've never made a mistake or misspoken or just flat-out been wrong about something. It happens. Regularly, as those who know me would attest. <nobr>;-)</nobr> But I don't intentionally make statements of fact that I know to be false. And I appreciate being corrected (politely) when I have been mistaken about something.

Steven: I have explained the injustice that I feel is suffered by non-tipped workers, and exactly why I feel that it is unjust. You apparently disagree.

You do have a point about strict language. And unfortunately we often mix and match common meanings of words and legal meanings of words depending on the context, so it's easy to get confused (or be confusing for that matter).

Tips are not strictly speaking wages, you are right. And I don't believe that I ever said they were. I said they were earnings which, as you pointed out, in fact they are.

Legally in Oregon, the "minimum wage" means exactly that -- the minimum amount of wages paid by the employer. That is the status quo in Oregon. That is not the status quo in 43 other states, and I am arguing in favor of changing the status quo here. And that is where the tips/wages/earnings/minimum wage thing gets confusing.

To clarify: In Oregon, the minimum wage is $7.25/hr. Tips may not be credited against this minimum wage. Strictly speaking, you are correct, there is a single legal minimum wage in the state.

Elsewhere in the country, using FLSA for example, the minimum wage is $5.15/hr. Tips may be credited against this minimum wage, up to $3.02/hr. Now, the tips are still not wages per se, as you correctly pointed out. But the tips count (are "credited") towards meeting the employer's minimum wage obligation. Strictly speaking using the precise language you want, in that situation then the true "minimum wage" is $2.13/hr. That is the absolute minimum amount that an employer must pay in wages, if the employee has earned enough in tip income to make up the remaining $3.02/hr. Yet, despite these precise definitions of wages, tips, etc. -- the federal "minimum wage" is still said to be $5.15/hr whether you earn tips or not, because that is the minimum amount that an employee can receive for his or her work. That is the common usage of the term "minimum wage", despite the fact that it may be made up of both wages and tips, both of which (as you helpfully pointed out) are earnings. Which is why I refer to this as a "minimum guaranteed earnings level".

Now, again, I'm arguing for a change to the status quo. And the rationale for that change, as I have stated repeatedly, is based on an understanding of "minimum wage" as "minimum earnings". Which, again, in 43 other states is the case, regardless of the fact that the official term is "minimum wage" and strictly speaking tips are not wages. So my usage of "minimum wage" is an entirely mainstream and well-understood usage.

Thus, applying the commonly accepted term of "minimum wage" to the equivalent situation in Oregon (minimum legal combination of tips+wages), we see that the common "minimum wage" in Oregon is higher for those who earn tips than for those who do not.

Which is exactly what I've been saying all along.

Legally speaking, you are correct. Practically speaking, I am correct. You seem to want to dismiss reality because it doesn't match the law. I wish to change the law to fit reality. If I didn't think the law needed changing, we wouldn't be having this discussion. So claiming that I'm wrong because that's not what Oregon law says today, is avoiding the argument.

By the way, earnings are income, but not all income is in the form of earnings, as you pointed out. Minimum wage (the common term across the country) deals with earnings. Other income streams are not relevant to minimum wage. Each person having a different income level depending on how much they personally take in through all forms of income is not at all unfair. But that's not my complaint.

My complaint is that, under the law in Oregon [to Phriedom: because of the law, which is why the law should address tips] some people have a higher guaranteed minimum level of earnings than others, because they are guaranteed to get $7.25/hr plus whatever they happen to make in tips. They are guaranteed to get more than $7.25/hr by law. Those who do not earn tips, are not guaranteed to get more than $7.25/hr. Why should some people get a better state-sponsored guarantee than others? I know why some people should actually get higher incomes than others, but that's not what we're talking about. We're not talking about the income a person manages to receive, we're talking about the legal guarantee of income as codified in the minimum wage laws of the state. Hence the injustice, unfairness, and special treatment under the law that exists today.

ORS 653.015 is "puffery"? Why, because it doesn't say what you want it to say? It's there for a reason -- to express the motivations behind the law. It is absolutely meaningful today, you just don't happen to agree 100% with the meaning. Which is fair enough.

The $8.50/hr argument is no straw-man, it's completely relevant to your earlier absolute statement: "The bottom line is that if you dock an employee's hourly wage because he/she receives tips, you are effectively stealing those tips." You said nothing about minimum wage. I simply gave an example of your premise where an employee's hourly wage was "docked" (as you put it) by 50 cents an hour, and asked if your conclusion was still true. What conditions in my example were changed from your original statement?

I may be splitting hairs here, but I don't agree that the current conditions amount to "some people get a better state-sponsored guarantee than others." Yes, tip-earners by definition are earning more than minimum wage. But the state-sponsored part is just the $7.25/hr part. The state-sponsored part is equal. Its the combination of state-sponsored minimum and social-custom sponsored tips that exceeds the minimum. It is unequal, but it is not unequal under the law.

David:

I should have referenced the exact quote of yours that prompted my reply. Here it is, from above in this thread:

Look up the word "embezzlement" sometime, my friend. With a tip credit, the tips are not appropriated for the use of the owner. They are given to the employee by the customer, and remain with the employee for the employee's use. Period. That is not embezzlement.

Given the reality of tip-sharing (which on a bad day can mean that you actually make less money than you are paying taxes on, as the feds expect to see tip income claims at approx. 8.5% of your total sales) your statement is incorrect.

But all that's just technicalities... the bottom line reason why I've read all your posts on this subject, and why I assume(d) you to be a shill for restaurant owners, is because I can't understand why you want to reduce the paychecks of some of the lowest paid workers out there. Which, no matter how you pretty it up, is exactly what you are proposing.

Phriedom, you are really talking about the crux of the disagreement here.

Those who think I am being ridiculous point to the Oregon law that say everybody is subject to a minimum wage of $7.25/hr and say, "the same number applies to everyone, that's fair."

Which reminds me somewhat of the quote from French novelist Anatole France:

"The law, in its majestic equality, forbids the rich as well as the poor to sleep under bridges, to beg in the streets, and to steal bread."

Anyhow, we're still hung up on cross-arguments about what the law says versus what it means, which is really the ultimate argument here. If we could agree on what the law meant, we would rather easily then be able to agree on what it should say.

And clearly, that's not going to be resolved here. <nobr>;-)</nobr>

Ken, thanks for the response. We're still talking about employees sharing the tip, and the employer not getting a cut? Correct me if I'm wrong on that, I've seriously never heard of an employer taking a piece of tips.

So if we aren't talking about the employer keeping a part of the tip, then what I said is not incorrect. "Employee" here is a general term, if you'd prefer I'll stipulate that it should have said "Employee(s)" to denote the possibility that more than one employee would be involved in sharing the tip. Point being, the employer doesn't.

Now if in fact the employer did keep a part of the tip, that would still not be embezzlement, since the tip wasn't "entrusted" to the employer for someone else's use to begin with. That would be more along the lines of stealing, if taken without the permission of the employee(s) involved. However, if you as the employee know that this will be the arrangement when you are hired, your acceptance of the job would be tacit consent to the arrangement, therefore it would be neither embezzlement nor stealing.

Question for you regarding the tax issue (which is completely beside the point, but I'm seriously interested) -- you mention the 8.5% federal assumption of tip rate, how does that actually apply? Are your reported earnings on your W-2 simply inflated by 8.5% of the total bills served? Or is that the assumed rate for withholding purposes on a given paycheck, to be adjusted at the end of the year based on your actual reported tip income? It's kind of an accounting rather than a legal issue, having to do with the mechanics of reporting tip income, but I am curious.

To be clear, I don't want to reduce anybody's paycheck. What I want is to provide fair protection under the law to all employees. I do understand that this will have the effect of reducing some peoples' paychecks, but that's not the motivation in the slightest.

But I don't really think the opposition is against me simply because it would reduce anyone's paycheck.

Let me throw out a hypothetical. Let's say for the sake of argument, that we enact a law which grants $1.00/hr tip credit, and raises the minimum wage to $8.25/hr. The effective minimum actual wages would still be $7.25 for those who earn tips, their paychecks would not be affected in the slightest. Unless, of course, they weren't averaging $8.25/hr anyhow, in which case they'd get a raise to the guaranteed level of $8.25/hr including tips. But those who do not earn tips would, as I put it, get the equal protection of also having the guarantee of earning $8.25/hr.

Would that change anybody's mind about the fundamental "fairness" of such a plan?

The 8.5 percent thing is "common wisdom" among restaurant workers, or at least was - I haven't been in the business in several years. The concept was... if you're not claiming at least 8.5 percent of your sales in tips, that's likely to make the IRS want to take a closer look (of course that information would only come to the IRS if the audited the restaurant first, and of course the law requires all tip income to be reported).

David, you say you "want to provide fair protection under the law to all employees." That is not what your arguments have been. Clearly there is nothing unfair about the existing law to employees... unfair to owners? Well, you can believe that if you want. I don't.

As far as tip "sharing" there's too much to it, I don't want to take the time to get into it. Let's just say the implementation of tip sharing varies widely. Too often, it is onerous for the wait staff and a money saver for owners.

Ken, at first I was completely baffled as to how you could think I've not been arguing about fairness for employees (tip earners and non-tip earners alike) all along. I've certainly said as much throughout, probably (though I haven't looked back to verify this) in every post I've made in this thread.

But then I realized, of course since I've been stressing that placing the minimum wage burden exclusively on employers and not considering tip income is what makes it unfair to non-tip earners, that could easily be misinterpreted as advocating for the employers themselves. I don't particularly care whether the current law is especially unfair to employers, that's not it at all. Whatever else we might disagree about, I expect we can all agree that the point of the minimum wage law is definitely not to be fair to employers.

My concern is all about non-tip earners getting in fact less of a real minimum wage than tip earners do. That is what I've been claiming is unfair. That is what most people in this thread disagree with me about.

Hence my most recent presentation of the concept in terms of an increase in the minimum wage, with the addition of a tip credit, to filter out any kneejerk reaction to the idea of an employee seeing a real decrease in income. Obviously the ORA and many other employers across the state would have a cow if we really tried to increase minimum wage by $1. But it illustrates how the tip credit addresses my concern about fairness to all employees in a way that my previous arguments clearly could not.

Of course, as I said I don't expect anybody to be swayed by that argument. But I'm hoping at least that it'll help people see my point of view. <nobr>;-)</nobr>

David: Wow. You seriously think that wage fairness problems lie at the bottom of the ladder?

How, exactly, would things be "more fair" to decrease the real income of minimum wage + tips earners, and give the resulting dollars not to the untipped employees, but to the owners? Sorry, but that's just nuts.

I'm all for income redistribution... under the maxim "rob the rich, feed the poor". Rather than taking income away from the lowest paid workers, we need to be taking it away from the wealthiest. I want a maximum wage. I want minimum wage to be a living wage.

Go ahead and keep on with trying to impose your "fairness" on minimum wage earners, though. I think the efforts might help my cause more than yours :-)

Ken, I'm not claiming that any specific wage level is either "fair" or "unfair". My concern in this case is with the application of the law, not the amount. And since we're talking about a "safety net", at the bottom of the ladder, that's where this one specific problem is, yes.

Did you consider my example where nobody loses money with the tip credit, because the minimum wage is increased by the amount of the tip credit? I would hope this illustrates my point without the side effect of taking money away from people.

Maximum wage huh? Well, you keep trying with that one, it'll sure help my side... <nobr>:-D</nobr>

C'mon. Your concern is "the application of the law"? Baloney. You want to change the law itself, not the way it's applied.

Anywho, whaddayawanna bet that my proposal (let's call it 80% tax on income over 1 million dollars, for arguments sake) would beat your proposal (let's f*$k with minimum-wage workers) in a free, fair, honest, high-participation election? Theoretically, y'know.

PS That's a very reformist position for me, just to try to be talking on the same wavelength. In actuality we need a revolutionary economic change, not a reformist one.

Ken, fair enough. "Application of the law" is probably a poor way to say what I meant, which is that the law as it currently applies to everyone is unfair regardless of what the official "minimum wage" amount might be. You are absolutely correct, I do wish to change the law so that when applied to all employees, it is fair.

But geez, nobody's buying what the other side's selling here, huh? <nobr>:-D</nobr> Guess it's time to move along...

So anyway, is this 80% rate intended as a state tax rate, or federal? I think it would make a difference. As a state tax rate, it would probably be defeated in a free, fair, honest, high-participation election, because those who make $1M+, while a miniscule minority of the population, would spend a whole hell of a lot to defeat it by advertising what a terrible plan it would be for Oregon. And that would be a lot easier case to make if it's just a state tax, for a number of reasons.

As a national tax rate, it would be absolutely doomed. Granted the argument about being a single renegade state would be off the table, but nationwide you'll find even less support for higher taxes (especially the punitive, confiscatory kind like this would be) than here in Oregon. Remember that a majority of the country supported Bush's tax cuts, at least initially. You could probably get support for at least a partial repeal of those cuts nation-wide, hell I'd support that -- but something so radical as that 80% rate just wouldn't have a chance.

Revolutionary economic change, eh? Well, that's never going to come at the ballot box.

You know, Americans on the whole are a remarkably optimistic people. That's a big reason why it's so hard to really put the screws to the rich. Because deep down, most people in this country hope to BE rich some day.

The vast majority of us won't be, of course.

But it's the possibility that we might, that keeps us going.

So putting in place a really punitive system against the rich would require, in effect, admitting defeat -- acknowledging that we're never going to be rich enough to be affected by that 80% tax. That's a tough sell. Maybe not to the disaffected poor with nothing to lose, but to anybody who's making a halfway decent living with enough hope for success under the current system.

Just a thought. <nobr>;-)</nobr>

David,

Arguing with you seems as pointless as trying to stand a pencil upon on end. If you had your feet planted on some core philosophy then there might instead be some fun in nudging you, for the sake of argument. Go read some John Stuart Mill, at least the wikipedia blurb on reasoning.

Your recent argument about the disparity of treatment of non-tipped and tipped worker is too simplistic. Can it contend with either of two alternative situations? 1) a dancer that gets no wage and gets no more the 3 dollars per hour in tips, and 2) the failure of the minimum wage law to include the regulation of the wages of all workers, including those who today make much more then the minimum, for more reasons than merely tips.

As to the general proposition of establishing any minimum wage law at all I can point to objections based on notions of consumer sovereignty, where here no business is entitled to a dime and thus their involvement in the labor market is just a thing to measure. The notion of a hard and fast formula does exist for the relationship between labor and capital, and that is labor laws to provide some mutuality of bargaining power. Such concepts are, to me, clearer than wrestling with the absolutely arbitrary method of picking a number number out of a hat for the setting of a minimum wage. In isolation, a state set minimum age plus tips is itself an arbitrary thing with a variable component. In isolation, a state set minimum wage but only if it is not otherwise met by tips is itself arbitrary. Go back to my point 1 and 2 above and see if your arguments, the reasoning you are applying, could be used to integrate these alternative situations. If they cannot, then consider whether your contributions are just filling space, leaving it up to others to figure out that your argument is as balanced as that of an upended pencil.

If you stick to the fairness argument you sound as though you are arguing something more akin to “to each according to his need,” if you get my drift? Are you arguing for state intrusion or liberty from the state, go make up your mind. If you do not like government intrusion then do not argue the illogic of increasing intrusion to the point of having one wage for all under all circumstances.

Ron, the minimum wage law applies to employees, not strictly speaking "workers". If I used the term "workers" (I don't recall doing so) then that was my mistake.

1. If the dancer is an actual employee (and not an "independent contractor" where the minimum wage law is moot) then in your scenario it would be illegal for the dancer to receive no wage and only $3/hr in tips.
   
2. Those employees who earn more than the minimum wage now have those wages counted towards the meeting of the minimum wage obligation. The exception is tips. In my case, for example, 100% of my earnings (made up entirely of wages) are considered when determining whether enforcement of the minimum wage is required. In my case enforcement is not required, but if it was necessary, the most I'd be entitled to (actually and effectively) is $7.25/hr. On the other hand, someone who earns tips has less than 100% of their earnings (wages + tips) considered when determining whether enforcement of the minimum wage is required. And, if required, the most that person would be effectively entitled to is something more than $7.25/hr.

To use another example, say person A is paid $7.25/hr by his employer and does not earn tips. Person A has met the minimum wage requirement, everything's fine. Person B, on the other hand, makes $4/hr in tips. That alone does not meet the minimum wage requirement of course, but since those tips don't count, person B must also be paid $7.25/hr by his employer. That makes, in this particular case, person B's effective minimum wage $11.25/hr. Of course, depending on the level of tip income over time, person B's effective number will vary quite a bit. But it will NEVER be as low as $7.25/hr. Hence, person B is guaranteed a higher minimum wage than person A.

And, as I stated a few posts back, a pure application of my core philosophy would demand 100% tip credit (in which case, person B from above would still have to be paid $3.25/hr by his employer). I stand by that. And incidentally, I suspect John Stuart Mill would agree with me. <nobr>;-)</nobr> But I'm also realistic enough to understand that 100% tip credit is not going to happen, so I've offered a compromise.

I have also not argued for or against having a minimum wage at all, because this is a completely separate issue. If we're going to have a minimum wage, then I believe it should operate fairly on all those subject to it. My proposal is "state intrusion neutral", i.e., neither increases nor decreases the amount of intrusion that we currently have by the state into the labor market. I'm hardly arguing a "to each according to his need". I don't advocate equality of earnings as the ideal of "fair". I've never said or even implied that I think there should be one actual wage for all. I'm simply saying that if we have a safety net, a bare minimum below which nobody is allowed to fall, that net should be set at the same level for everyone. Whether the net should be there at all is a different matter entirely.

Hi my name is kellie and i have been in the srevice industry for 23 years. I have worked in a total of 6 different states all of them with different minimum wage standards and all of them in different income ra-tios of the customers who inhabit them. I started out as a bus girl then a hostess then waitress then manager and finally bartender. I think that the point everyone seems to be missing here is that the people who choose to be in this business also have the choice to earn more money by the position they pick, the ammount of effort they put into it, the skills they develop, the dependability they offer and the drive to be more committed to doing better every day ..week.. month.. year. How much skill do you think it takes to load a dishwasher as opposed to keeping recipes in your mind of over 2000 drinks, sauces and dishes. How about juggling 10 -50 customers or more at one time to keep them all happy? How about the legal responsibility of over serving alcohol to someone who will turn around and sue you because they don't know how much they can or can't drink? What about the ammount of monry collected that you are accountable for? And lastly the fact that most restaurant employees tipped or not do not have any type of medical or health benefits? There is no law that says a patron has to leave a tip of any size they do it to insure prompt(or perfect) service (T.I.P.S.) the next time they go out. They do it so their favorite server stays at their favorite restaurant in stead of moving on to a higher waged job and the fact of the matter is is that if a restaurant ownner wants to be successful they better find a way to keep their good employees from leaving. Putting a freeze on the wage would not do this and in the end be a detriment to them. By the way even as a tipped employee the minimum wage in this country is far lower than what any person could feasably live on working a 40 hour work week. If anyone out there can raise a family on less than 300 dollars a week with no benefits I'd like to see them try. In ending I'd just like to say that as the service industry in this country increases so does the economy. This is not only field in high demand but people have come to rely on it for their own lifestyles. The more people we employ at a higher minimum wage the less people we will have living off welfare and eventually this should cost the tax payers, the government and the employers less dollars. Thankyou for taking the time to hear my view. I welcome any responses.Kellie

David, while your points may deal only with things within the scope of the current statutes, I am hoping to see what a wage related law might look like if you could design it outside the boundaries of the current legislation, and perhaps more importantly, what guiding principal you might apply. That way I can then match your broader arguments to this current law and the micro issue of tip/non-tip wage.

Why on earth should the state compel one private individual to pay something to anyone else? Could we all pretend it is like a kids Christmas gift-exchange party and draw lots where person X pulls out the name of person Y and person X must assure that person Y gets a minimum wage, and cough up any deficiency? A safety net goal is no justification whatsoever for such a compulsion between two private individuals. There must be something more. Merely looking to whether an unjustified compulsion, as a kids Christmas party safety net, is applied uniformly adds nothing either, other than yet another distraction in analysis.

If you think that the current law, in an unaltered form, is itself a violation of some fairness principal then we have a series of cases dealing with the equal privileges and immunities clause. I don't think that a court would strike either contemplated formula, so long as the the minimum is covered, with or without inclusion of tips in the calculation; nor would a court find fault in not having a minimum wage law at all. Pretend that the current minimum wage law did not exist at either the state or federal level. It is at this level, in the face of no government intrusion into setting wage levels between private parties, where the court could nevertheless be available to aid persons not otherwise able to strike a fair bargain with employers. The harm is the lack of mutuality of bargaining power and, as usual, the focus a remedy upon the potential right of workers to bargain collectively.

You cannot pretend that the current minimum wage law exists in some kind of vacuum, analytically detached from the harms intended to be remedied by state set rates as a direct substitute for enhancing the potential for collective action by the workers via unionization.

If the state wants to give money to workers they can go build things like Timberline Lodge and such. Otherwise, the issue on minimum wage has everything to do with the level of intrusion that the state can impose upon a private party that wishes to make use of labor services of another party.

If the state sets a minimum wage it is doing so at the direct expense of creating enhanced opportunities for unionization; and perhaps with the intention of defusing some demand for unionization. If the minimum wage were set at 10 cents per hour how much motivation to unionize would have been defused?

There is a valid argument to make regarding the differential treatment of non-tipped workers and workers who also get tips. If there did not exist a minimum wage at all for anybody, and the sole focus was unionization, then the inquiry would be whether these two groups should be in the same bargaining unit or in separate bargaining units. The fairness inquiry, as between the non-tipped employee and those that get tips would be one that is relevant to a union context where the negotiators played off these two groups in negotiations. If the treatment of tips was a sticking point, one that those receiving tips would strike over and the non-tipped employees would not then there might not be enough shared interests to maintain and negotiate as one bargaining unit. We would simply have two bargaining units rather than one.

Now transpose that union representation issue, that of one versus two distinct bargaining units, to the legislative arena. While the concern for the setting of a minimum wage can be viewed as one amorphous blob, including tipped and non-tipped workers, this is too simplistic. Sure, one could say that the tipped employee, the one that gets 10/hr or more, should be considered to have met some threshold minimum, and in a more sophisticated ideology not suffering any harm for which the government needs to prevent. Yet that does not end the inquiry, I would return to the argument about whether there does or does not exist adequate collective bargaining rights for the tipped workers to bargain with some semblance of mutuality with business operators. The tipped workers are not one in the same with the non-tipped worker, they are different groups. Matching this group of tipped worker against only non-tipped workers for analysis is foolish, to the extent that they are matched only against minimum wage earners. They could just as easily be matched against construction workers on federally funded (partially) public works projects where the inquiry is that of the prevailing wage. They could also be matched against the pay of unionized and politically influential public school teachers. The existence of these other examples throws a rather large monkey wrench into anyone's conceptual claims of justice or injustice of the minimum wage.

What would be the justice of the government setting the pay scale for ALL people in both private and public employment? I think the loss of liberty, individual liberty, would be crystal clear to all in such a view. The issue of bargaining rights is not a separate issue, nor is the minimum wage the sole method and sole peg for measuring social justice and social injustice.

Ron, as interesting as a comprehensive discussion on labor law in this country might be...

I've limited my arguments to the scope of the minimum wage law, because that was the topic of the thread. If you want to discuss the abolition of minimum wage and increased union representation for all workers, with some sort of expanded collective bargaining rights... well, that's gonna have to wait for another thread.

You are right, though, that individual elements of labor law don't exist in a vacuum. However, modification of anything as complicated as labor law must realistically be an incremental process. Evolutionary rather than revolutionary.

How do you eat an elephant?

One bite at a time, my friend. <nobr>;-)</nobr>