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Senate Bill Reheats Food Service Debate

Local Matters


Published March 28, 2007 at 9:26 a.m.

MONTPELIER - Fourteen cents may not seem like much when you're leaving a tip at a restaurant. But Amy Vetters says otherwise. Vetters, a 22-year-old student at Johnson State, has waited tables for years - most recently at Friendly's and TGI Friday's. Even a small wage increase is like any raise, she says. "You don't see it very often. But when you do, it lights up your day."

Under current law, Vermont servers who take in $30 a month in tips are guaranteed a minimum wage of $3.65 - a rate that has not increased since 2005. The state's general minimum wage is $7.53 and is indexed to inflation. If approved by the Vermont House, S.27 [read text of bill] - which passed in the Senate 24-4 on March 21 - will also index the "tipped minimum wage" to a cost-of-living adjustment, beginning next January, and will reclassify "tipped workers" as servers who earn more than $120 per month in tips.

However, a third clause that would have immediately raised the tipped minimum wage by 14 cents was struck down at the 11th hour - a decision that could exacerbate existing tensions between restaurant owners and their employees.

It's unclear how the bill would affect higher-wage workers. David Wolfe, 50, a server at the upscale Leunig's Bistro and Café in Burlington, comments, "This bill is not about the situation I'm in. I care about it because I care about people who work in seasonal catering, chain restaurants and other places that don't do as well."

Justin Duwe, 23, a server at Smokejacks, takes a different view. "Just because I work at a nice restaurant doesn't mean I don't have to worry about money," he explains. "To have an extra dollar or two an hour would make a difference."

If Vermont's tipped minimum wage had kept pace with inflation since 1990, it would now be $4.53. Newcomb Munt, who recently opened Tilley's Café in Burlington and is the son of former Senator Janet Munt, makes up this difference by paying his employees $5 per hour besides tips. Munt asserts, "In other parts of the country and the world, servers are more respected. It's a shame that we still live in the dark ages."

But Al Gobeille, who owns three Burlington restaurants, including the Shanty, calculates that servers there make $17.08 before taxes. "If you raise the tipped minimum wage," he notes, "it comes off my bottom line - which hurts the other people I'm trying to pay."

Gobeille, former chair of the Vermont Lodging and Restaurant Association and current board member of the Lake Champlain Regional Chamber of Commerce, points out that he already pays all his employees more than minimum wage. Plus, he says, fuel and liquor inspection will cost him an extra $17,000 this year, to say nothing of impending fees for Catamount Health, which goes into effect April 1. "If [the legislature] raised the tipped minimum wage a buck or two," he says, "I don't know if I'd be in business in a year."

Senators John Campbell (D-Windsor), Jim Condos (D-Chittenden) and Hinda Miller (D-Burlington) proposed eliminating the 14-cent raise from the bill. The Vermont Chamber of Commerce supported the move. "Fourteen cents is simply taking away from what the employers have available for wages overall," says VCC President Duane Marsh, adding that it "will hurt back-of-the-house folks who don't get tips."

An existing "tip credit" provision requires restaurateurs to pick up the slack if their servers make less than $7.53 per hour. But Miller - whose committee did not take testimony from servers - says it's a mistake to "confuse the tipped minimum wage with [its] enforcement."

Emma Mulvaney-Stanak is director of the Peace and Justice Center's Livable Wage Campaign, which has been pushing for a stronger version of the bill. She stresses that last year only four "tip-credit" claims were processed - an indication that some Vermont restaurant owners are ignoring the law, she claims. "Not all employers know that the rules exist," she says, adding that servers can face discrimination for speaking out about wage violations.

The House will take up S.27 in the coming weeks. The chamber had been working on its own tipped-minimum bill, H.249 [read text of bill], which includes a provision to raise the servers' rate to $4.65 beginning in 2008.

Rep. Rachel Weston (D-Burlington) is one of 24 co-sponsors of H.249. A former server herself, the 25-year-old rep suggests, "Any increase to the tipped minimum wage is going to benefit Vermont's economy."

Gobeille isn't convinced. "You can't increase wages arbitrarily and think you'll have healthy small businesses," he says. "Most of us [owners] are just trying to get by, just like our waitstaff."