Week 9 EOC: Tipping

With the restaurant industry growing more and more, that calls for more employees--  tipped employees, such as waitresses, bussers, servers, and carhops. Over 10 million people in the United States are working at a federal tip-wage, only 2.13 an hour.

However, the concept of getting rid of the tip-wage has come to the mind of many. If the tip-wage is cut and all employees within the food service industry are put at minimum wage, this can cause a problem. "The federal minimum wage for the latter is $7.25, but the federal minimum wage for tipped workers has remained stagnate at $2.13 since 1991, with no adjustment for inflation." (http://www.motherjones.com/politics/2014/05/minimum-wage-tip-map-waiters-waitresses-servers)

With a tip-wage being diminished and workers being put on the state-level minimum wage, jobs can be lost. In the food service industry, labor cost is one of the most important factors of the industry. Having more employees at a minimum wage level will deeply affect the staff situation-- employees may notice a cut in hours, or even be laid off. 

Within the industry are different components that qualify an employee as a "tipped employee".
A tipped employee must make over $30 a month in tips to qualify as one. As the tip-wage is set at a federal rate of $2.13, an employer must make up for the lost wages if an employee is not making the equal amount to the federal minimum wage. " A tipped employee engages in an occupation in which he or she customarily and regularly receives more than $30 per month in tips. An employer of a tipped employee is only required to pay $2.13 per hour in direct wages if that amount combined with the tips received at least equals the federal minimum wage. If the employee’s tips combined with the employer’s direct wages of at least $2.13 per hour do not equal the federal minimum hourly wage, the employer must make up the difference." (https://www.dol.gov/general/topic/wages/wagestips)

As the industry grows, more employment opportunities open up. However, industry growth can be brought to a halt if tip-wage is taken away. Within the industry, rumors about the tip-wage being taken away can cause job loss and cut hours. With many youth working in the industry as a starter job, employers are required to pay a set minimum wage on the tipped employees. "The 1996 Amendments to the FLSA allow employers to pay a youth minimum wage of not less than $4.25 per hour to employees who are under 20 years of age during the first 90 consecutive calendar days after initial employment by their employer. "(https://www.dol.gov/whd/regs/compliance/whdfs15.htm)