Tips boost a worker’s paycheck beyond minimum

February 24, 2019

House Bill 31, which passed the House recently, is focused on raising the minimum wage for the state of New Mexico, something most New Mexicans agree with. However, when it comes to removing the minimum wage exception for tipped employees, there has been no discussion of how this would impact families, the elderly and the general clientele who enjoy dining in our independent, moderately priced restaurants. What has been overlooked is any consideration of the personal relationships that exist between client and server, a crucial consideration for both parties.

Our moderately priced family restaurants offer the benefit of a friendly waitperson who communicates with the clientele, often establishing a personal as well as a professional relationship. They answer questions, describe a dish, make suggestions, interact with family members and provide other services, which are eliminated with a counter service model, or with technology.

Removing the tip credit raises many issues, none of which actually benefits the tipped employee or the customer. A gratuity is based upon the quality of service the diners receive, a system that has been in effect in the food industry as long as I can remember, growing up and working in my mother’s cafe in Albuquerque, on Route 66, back in the 1940s and 1950s. I still remember one particular waitress that I used to help by clearing and cleaning her tables. Her name was Ruth, a single mother, and her tips at the end of the day were always extremely generous, a reflection of how much her customers appreciated her friendliness and efficiency. She then shared her tips with me as a thank you for my help. These personal interactions and social relationships would be completely lost if tipping were to be abandoned in favor of an impersonal paycheck.

As my younger sisters and brothers grew older, we all worked in the cafe. What we earned in tips paid for school supplies, new shoes and other necessities we needed for school. Now, after 45-plus years in the business, seeing students and single mothers similarly benefiting from their gratuities in the hospitality industry has been most gratifying. Many young people have even been able to pay their way through college from tips earned by working part-time in our restaurants. This is particularly true in Albuquerque, where students at the University of New Mexico routinely count on their tips to cover their expenses.

The combination of tips earned, together with the paycheck they receive from the restaurant, is far in excess of the state’s proposed minimum wage. Typical hourly earnings of our waitstaff, including part-time employees, range from $18 to $25 an hour.

On a recent visit to California, where I discovered there was no minimum wage exception for tipped employees, I was struck by the fact that most moderately priced restaurants — those that were still in business — have now switched to a counter service model. I also noticed that many corporate chains are now placing iPads on tables, so that customers can order and pay with a credit card, completely eliminating any personal interaction.

Wishing to find out more about how restaurants were dealing with this situation, I spoke with the manager of a full-service, higher-than-moderately priced establishment. He explained that all tips were pooled and distributed among the workers in the restaurant, including the kitchen staff. This eases the financial burden that the restaurant has incurred because of the removal of the minimum wage exception for tipped employees.

House Bill 31, without the tip credit, as it stands, will drastically change the restaurant industry as we know it in New Mexico. Removing the minimum wage exception for tipped employees is a solution looking for a problem.

Georgia Maryol is the founder of Tomasita’s Restaurant.