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Senate OKs Bill to Reinstate Lower Minimum Wage for Tipped Workers

Kevin Bennett
Michelle, a restaurant worker at Cole Farm Restaurant in Gray, holds a sign in support of the tip credit in Augusta in April.

The Legislature has taken the first step toward repealing part of a law that requires tipped workers to get the same state minimum wage that others do.

The effort to restore the tip credit has the backing of Republicans and some Democrats, and from restaurant servers who fear that a higher minimum wage will result in fewer tips and amount to a pay cut.

The Senate voted 23-12 Wednesday to reinstate the tip credit, a provision removed last fall as part of a voter-approved referendum to increase the minimum wage. The vote followed a lengthy debate in which supporters of reinstating the lower wage for tipped workers argued that they were acting on behalf of restaurant workers.

Republican Sen. Roger Katz who sponsored the bill says voters were likely unaware of what they had done this past fall.

“Last November when voters approved an increase in our state minimum wage, I’m sure they didn’t intend to drive down the earnings of thousands of Maine servers and hurt our restaurant industry, but that is overwhelmingly what we are hearing the referendum has done. And we need to fix it,” he says.

By fix it, Katz means bring back the tip credit, a provision in Maine labor law that allows employers to pay tipped workers a lower minimum wage. Under the law approved in November, the tip credit would be phased out as the minimum wage is increased to $12 an hour by 2020. By 2024, tipped workers would make the same minimum as all others.

But many restaurant workers are uneasy about that because they believe customers will either decrease tips or stopping tipping altogether.

Democratic Sen. David Miramant of Camden says business groups and the Maine Restaurant Association have stoked that anxiety with misinformation.

“It’s about the associations that spread lies about the effects. We have many places in the world that don’t use tips as a way of compensating employees. They work quite well,” he says.

Democrats and progressive groups supported the ballot initiative. But the tip credit issue has divided Democratic lawmakers. Some with high concentrations of restaurants in their districts say they feel compelled to act on behalf of their constituents and join Republicans in reinstating the tip credit.

That position has put some Democrats at odds with activists groups like the Maine People’s Alliance, which backed the ballot campaign. Sen. Jim Dill of Old Town is among the lawmakers targeted by a lobbying campaign to keep the voter-approved law the way it is.

He says he has received a number of phone calls — some not so pleasant.

“Some of our allies took us to task for going against the voters’ will and it got nasty. So nasty, in fact, with the expletives every other word, that my wife was concerned that they’d be showing up on our doorstep,” Dill says.

But so far, Democrats willing to join Republicans in restoring the tip credit are undeterred. Five of them joined 18 Republicans in the Senate’s preliminary vote.

The bill now moves to the House. Democrats have a slim majority there, but unlikely enough votes to block the proposal, which Gov. Paul LePage is expected to sign.

This story was originally published June 7, 2017 at 1:19 p.m.