HB236: Attempt to bring base wage of tipped employees in line with national minimum fails

By Shauntel Forte
Capital West News

Currently in the State of Utah, the tipped employee wage stands at the low rate of $2.13 an hour, well below the minimum wage of $7.25; however, a recent bill from Rep. Justin Miller, D-Salt Lake City, would have brought the base wages of tipped employees in line with the statewide minimum.

According to Miller, there are 20,000 tipped employees in Utah and currently almost half of those employees qualify for subsidized governmental assistance. Since 1991, the rate has remained at $2.13 an hour and many employees are suffering because of wage stagnation.

Utah legislative committee meeting

Utah legislative committee meeting

“When is it appropriate for the state to engage in the private market? This is one of those times,” Miller said. “Close to 10,000 Utahns are currently living in poverty and we can change that.”

Tipped workers have hit a national record low of 29.4% in wages in the workforce, Miller said.  According to national census numbers, the average tipped employee makes $10.25 per hour, but in Utah that wage remains close to $8 per hour.

Many states have already adopted the set wage of $7.25 for tipped employees, and their restaurants are flourishing, Miller told the House Business and Labor Committee.

Although there has been a similar 3.9% growth rate in the restaurant industry in both California and in Utah, poverty rates among tipped employees in California is lower. According to Miller, poverty rates for non-tipped employees stand at 6.5% whereas among tipped employees it is fairly nearly double that figure.

“Tipped workers are predominantly woman,” Miller said. “We are looking at 66% within the tipped employee workers.”

Nearly half of tipped-employee workers receive financial help through governmental funds, and that rate is only increasing in the state. The high number of families seeking welfare creates a financial burden on the state. By raising tipped employee wages to state’s minimum wage, the burden would be alleviated and public assistance rolls would decrease, Miller said.

Heather Apo spoke in favor of the bill as a current tipped-wage employee. “We are dependent on the kindness of others. Tips are a bonus and it is not always a guarantee that you will get it,” she said. Raising the way to the national minimum would not only assure $7.25 for employees, but it would help families like her own to get out of poverty.

Melva Sine from the Utah Restaurant Association spoke against the bill, assuring that tipped employees across the state have never received less than $7.25 with added tips. She noted that tipped-employee wages do not need to be increased because it will hurt the restaurants’ total function and will be unnecessary.

The committee agreed with Sine and the bill failed in committee with an 8-4 vote.

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