Minimum wage and the food service equation

David Chartrand

David Chartrand

The federal minimum wage is $7.25 and it applies in every state.  It also applies to the businesses who fail to inform employees about their duties and the law’s requirements.

If there were an Olympic competition for mocking wage rules America’s food service business would take home the gold. Exhibit A: Waiters and waitresses are left unaware that a little-understood exemption sets their official wage at $2.13/hour minimum.  It’s been $2.13 for more than 20 years .

The math is fifth-grade algebra. At $2.13 an hour, a  40-hour pay period produces a paycheck of $85.20 before taxes. It says so right there on the server’s pay stub.

That’s the part of the law restaurant owners cannot hide.  The part they’d rather not discuss goes as follows:  $2.13 an hour is only a down payment on a waiter’s services.  The law stipulates that employer and employee must periodically sit down and tally the employee’s tips. Tip income is added to the official wage paid by the employer. The sum then is divided by hours worked.  If the resulting quotient is less than $7.25 — the federal minimum — the employer must pony up the difference.  If it comes to more than $7.25 the employee wins the whole pot. Continue reading

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