SENATE BILL: Amendment to The Productivity Equalization...Act... (Redrafted)

[President Tyrion]

Aye

However, the BIG would make me willing to accept a version of this bill with the last clause stricken.

[President Tyrion]

Also as an addition in the redraft, maybe we could require gratuity, as is done at some restaurants already? This would avoid one of the key problems with tipped employment, which, of course, are deadbeats who don't tip the server.

Could we set a 5-year plan to have food service gratuities written into the displayed cost of the food?

I'm also assuming that the average tip should drop (as it really should) after this legislation.

[President Tyrion]

Well, $11 as an average is absolutely unacceptable considering the current minimum wage. I mean, that means a ton of people are making below $11 as well.

[President Tyrion]

Well, $11 as an average is absolutely unacceptable considering the current minimum wage. I mean, that means a ton of people are making below $11 as well.

Right, which is why maybe we should look at an opt-in clause or something? I don't know. I just know that at high end restaurants, servers make far more than minimum wage. My cousin served at a 5 star restaurant here in town and make $100,000 a year on tips + $2.00 or whatever they paid him.

If we do raise the minimum wage, we will have to structure it like Europe does to pay servers a salary.

An opt-in would be fine with me.

We'd probably have to structure it with some care, though.

[President Tyrion]

I think there are a few contradictions here, if I am understanding this right.

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So, is the wage chart just advisory? Are the productivity and inflation increases tacked on to the minimum wage, making the effective minimum wage on, say July 1, 2015 slightly greater than $7.25?

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I think these clauses might be directly contradictory.

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Asked by the employer, or by the state, or both?

[President Tyrion]

Wait, I have revisions. Since we're in the redraft process, TNF would have to decide whether he wants to send my version back or just the redrafted version, right? In any case, I believe this amendment is fairly uncontroversial. I believe I misunderstood the President's redraft initially, because Clause 5 is specifically for people who opted in to the compensation adjustment, so hopefully my amendment reflects that newfound understanding.

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2. The minimum wage for tipped employees shall, upon the passage of this legislation, automatically adjust for increases in worker productivity and inflation at the same rate as does the regular federal minimum wage. The previous chart shall not be construed to deny a minimum wage adjustment based on inflation or increases in productivity to any employee.

3. The scaled increase to the minimum wage for tipped employees, as noted in Section 1 shall expire on January 1, 2020 and the tipped minimum wage shall, at that point, be equalized to the regular federal minimum wage. There shall, from January 1, 2020, be no difference in the federal minimum wage for tipped and other employees.

4. From the period between January 1, 2014 to January 1, 2020, tipped employees may 'opt-out' of the compensation adjustment for tipped employees. In doing so, tipped employees shall be paid the previous federal minimum wage for tipped employees until the next scheduled increase, at which point they will be once again asked by their employer whether or not to 'opt-out' of it.
   4a. Tipped employees having opted out of the compensation adjustment schedule shall be paid a gratuity of 20 percent automatically charged on all purchases by any employer employing tipped employees foregoing the compensation adjustment schedule.
   4b. Effective January 1, 2020, the opt-out provision of this law and the automatic gratuity charge shall be terminated and all employees currently paid in tips instead paid the federal minimum wage.
   4c. Employers may not deny the right of employees to opt in or out of a tipped compensation program. Denying a worker such a right is punishable by law and may result in the loss of one's business license and/or a fine of up to $25,000 per denied employee.
   4d. Employers and employees must indicate the form of compensation on tax documents from any jurisdiction. All jurisdictions must recognize both forms of compensation for currently tipped employees.

5. Restaurants shall not charge a service charge exceeding X% on services rendered by employees who have opted in to the compensation adjustment program. The value of X will be determined by the following chart, with each date meaning that the maximum service charge will be X% until the next listed date, or indefinitely if there is no next date.

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[President Tyrion]

Hm, in that case, we should vote on and reject the redraft, resume debate, assess my amendment, and then send it back to the President. I do think my amendment is necessary.

[President Tyrion]

Okay, let's just reject this redraft and resume debate if that's what we have to do. I'm unclear on the process honestly.

Well, if you like my amendment, you could just pretend it's your amendment and make it part of your redraft. That's kosher, right?

[President Tyrion]

The only problem I have with your amendment is with the 5th point.

The way I am understanding the business model of European restaurants/service positions is, the restaurants charge a service fee instead of asking patrons to tip. They use this fee to fund the salaries of their employees.

I don't think it's plausible for us to eliminate BOTH tipped positions and forbidding restaurants to charge a service fee while demanding they pay their workers minimum wage. If we did that, we would do a lot of harm to the industry and put a lot of places out of business. The profit margin for restaurants is already pretty thin, around 1-2%, and that's with the current system.

Hm, with more consideration, I think you might be right. How about we put back the 15% standard, then?

[President Tyrion]

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2. The minimum wage for tipped employees shall, upon the passage of this legislation, automatically adjust for increases in worker productivity and inflation at the same rate as does the regular federal minimum wage. The previous chart shall not be construed to deny a minimum wage adjustment based on inflation or increases in productivity to any employee.

3. The scaled increase to the minimum wage for tipped employees, as noted in Section 1 shall expire on January 1, 2020 and the tipped minimum wage shall, at that point, be equalized to the regular federal minimum wage. There shall, from January 1, 2020, be no difference in the federal minimum wage for tipped and other employees.

4. From the period between January 1, 2014 to January 1, 2020, tipped employees may 'opt-out' of the compensation adjustment for tipped employees. In doing so, tipped employees shall be paid the previous federal minimum wage for tipped employees until the next scheduled increase, at which point they will be once again asked by their employer whether or not to 'opt-out' of it.
   4a. Tipped employees having opted out of the compensation adjustment schedule shall be paid a gratuity of 20 percent automatically charged on all purchases by any employer employing tipped employees foregoing the compensation adjustment schedule.
   4b. Effective January 1, 2020, the opt-out provision of this law and the automatic gratuity charge shall be terminated and all employees currently paid in tips instead paid the federal minimum wage.
   4c. Employers may not deny the right of employees to opt in or out of a tipped compensation program. Denying a worker such a right is punishable by law and may result in the loss of one's business license and/or a fine of up to $25,000 per denied employee.
   4d. Employers and employees must indicate the form of compensation on tax documents from any jurisdiction. All jurisdictions must recognize both forms of compensation for currently tipped employees.

5. Restaurants shall not charge a service charge exceeding 15% on services rendered by employees who have opted in to the compensation adjustment program.
[/quote]

This good?

[President Tyrion]

Yep. I just proposed it above. Hopefully that can serve as my redraft instead of having to vote and amend.

Oops, my bad, somehow missed that.

[President Tyrion]

Aye!