SENATE BILL: Amendment to The Productivity Equalization...Act... (Redrafted)

[TNF]

Also as an addition in the redraft, maybe we could require gratuity, as is done at some restaurants already? This would avoid one of the key problems with tipped employment, which, of course, are deadbeats who don't tip the server.

[President Tyrion]

Also as an addition in the redraft, maybe we could require gratuity, as is done at some restaurants already? This would avoid one of the key problems with tipped employment, which, of course, are deadbeats who don't tip the server.

Could we set a 5-year plan to have food service gratuities written into the displayed cost of the food?

I'm also assuming that the average tip should drop (as it really should) after this legislation.

[Fmr. Pres. Duke]

I'm going to be late on this, but I want to get a redraft in with scaled like TNF proposed. My last exam is on Friday morning and after that, I will be back to full capacity.

If you all have proposals and what have you, please go ahead and post them here so I can propose my redraft before time expires. I think Saturday is my deadline, which works for me.

[Fmr. Pres. Duke]

It is important to note that the US Labor Department found that the average hourly rate of a tipped position was $11 in 2012, and it went much higher. If we did pass this law raising the minimum wage to X amount and presumably charged a service charge like European restaurants, that stands to hurt servers in high end restaurants.

PERHAPS we can do something like an opt-in program, where a server can choose either the hourly wage or the tipped wage?

http://articles.chicagotribune.com/2012-04-25/opinion/ct-perspec-0425-tips-20120425_1_minimum-wage-restaurant-employees-tip

My source for my information from the Chicago Tribune. Food for thought. Carry on, senators.

[President Tyrion]

Well, $11 as an average is absolutely unacceptable considering the current minimum wage. I mean, that means a ton of people are making below $11 as well.

[Fmr. Pres. Duke]

Well, $11 as an average is absolutely unacceptable considering the current minimum wage. I mean, that means a ton of people are making below $11 as well.

Right, which is why maybe we should look at an opt-in clause or something? I don't know. I just know that at high end restaurants, servers make far more than minimum wage. My cousin served at a 5 star restaurant here in town and make $100,000 a year on tips + $2.00 or whatever they paid him.

If we do raise the minimum wage, we will have to structure it like Europe does to pay servers a salary.

[President Tyrion]

Well, $11 as an average is absolutely unacceptable considering the current minimum wage. I mean, that means a ton of people are making below $11 as well.

Right, which is why maybe we should look at an opt-in clause or something? I don't know. I just know that at high end restaurants, servers make far more than minimum wage. My cousin served at a 5 star restaurant here in town and make $100,000 a year on tips + $2.00 or whatever they paid him.

If we do raise the minimum wage, we will have to structure it like Europe does to pay servers a salary.

An opt-in would be fine with me.

We'd probably have to structure it with some care, though.

[TNF]

My proposal:

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2. The minimum wage for tipped employees shall, upon the passage of this legislation, automatically adjust for increases in worker productivity and inflation at the same rate as does the regular federal minimum wage.

3. The scaled increase to the minimum wage for tipped employees, as noted in Section 1 shall expire on January 1, 2020 and the tipped minimum wage shall, at that point, be equalized to the regular federal minimum wage. There shall, from January 1, 2020, be no difference in the federal minimum wage for tipped and other employees.

4. From the period between January 1, 2014 to January 1, 2020, tipped employees may 'opt-out' of the compensation adjustment for tipped employees. In doing so, tipped employees shall be paid the previous federal minimum wage for tipped employees until the next scheduled increase, at which point they will be once again asked whether or not to 'opt-out' of it.
   4a. Tipped employees having opted out of the compensation adjustment schedule shall be paid a gratuity of 20 percent automatically charged on all purchases by any employer employing tipped employees foregoing the compensation adjustment schedule.
   4b. Effective January 1, 2020, the opt-out provision of this law and the automatic gratuity charge shall be terminated and all employees currently paid in tips instead paid the federal minimum wage.
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How does this look? Basically you would have to choose between the higher minimum wage or the last scaled minimum wage plus a 20 percent gratuity every time the scale went up. This gives everyone a pay raise while (hopefully) ending tipping as a practice by at least 2020.

[Fmr. Pres. Duke]

That's fine if we are okay with eradicating tipped positions and moving towards the European style service charge + higher wage.

Given my crunch for time, I'd rather go with this than nothing at all. You're a lucky man, TNF.

[TNF]

That's fine if we are okay with eradicating tipped positions and moving towards the European style service charge + higher wage.

Given my crunch for time, I'd rather go with this than nothing at all. You're a lucky man, TNF.

I am quite fine with this change, Mr. President.

[Fmr. Pres. Duke]

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2. The minimum wage for tipped employees shall, upon the passage of this legislation, automatically adjust for increases in worker productivity and inflation at the same rate as does the regular federal minimum wage.

3. The scaled increase to the minimum wage for tipped employees, as noted in Section 1 shall expire on January 1, 2020 and the tipped minimum wage shall, at that point, be equalized to the regular federal minimum wage. There shall, from January 1, 2020, be no difference in the federal minimum wage for tipped and other employees.

4. From the period between January 1, 2014 to January 1, 2020, tipped employees may 'opt-out' of the compensation adjustment for tipped employees. In doing so, tipped employees shall be paid the previous federal minimum wage for tipped employees until the next scheduled increase, at which point they will be once again asked whether or not to 'opt-out' of it.
   4a. Tipped employees having opted out of the compensation adjustment schedule shall be paid a gratuity of 20 percent automatically charged on all purchases by any employer employing tipped employees foregoing the compensation adjustment schedule.
   4b. Effective January 1, 2020, the opt-out provision of this law and the automatic gratuity charge shall be terminated and all employees currently paid in tips instead paid the federal minimum wage.

5. Restaurants shall not charge a service charge exceeding 15% on services rendered by employees who have opted in to the compensation adjustment program.
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I added a fifth bullet to the 4th section. The average service charge in European restaurants is 12%, so I expect we need to at least clarify and regulate restaurants charging obscene service charges and pocketing the money themselves.

With this opt in clause, we can at least see if the program is having its intended effect. If it hurts people tremendously, we can always repeal it. I just hope it will do more good than harm.

Feel free to discuss this as you wish. I wanted to get this published before I went back to studying and/or time expired.

[President Tyrion]

I think there are a few contradictions here, if I am understanding this right.

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So, is the wage chart just advisory? Are the productivity and inflation increases tacked on to the minimum wage, making the effective minimum wage on, say July 1, 2015 slightly greater than $7.25?

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I think these clauses might be directly contradictory.

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Asked by the employer, or by the state, or both?

[Fmr. Pres. Duke]

Restaurants in Europe have a service charge on all their bills and supposedly pay their help that way. I don't think we can simply raise the wage rate and call it a day. That isn't how it works overseas either. A service charge replaces a tip which pays the employees. From my understanding, you may tip more afterwards, but you aren't really required to like we are here.

So, with this bill, we are assuming that we want to replace our current system with a European type one. Businesses will have to charge a service fee (I think 20% is too high given it is only 12% overseas) to offset the lack of tips.

Those are my thoughts. I am studying for my commercial law exam, so I can't really participate in the debate much more tonight, but I will try to this weekend. I just wanted to propose this before the time expired.

[TNF]

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The latter. Essentially what this says is that the minimum wage on, say July 1, 2015, will not be lower than $7.25. If increases in inflation and in productivity make it higher, that's fine; it just won't be allowed to be lower than $7.25 at that point. The existing federal minimum wage works the same way as per the Fair Labor Standards Act.

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I agree; I think that we need one or the other. I would prefer my version, but I'm all for whatever the President will sign into law here.

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The employer.

[Southern Senator North Carolina Yankee]

So are there any revisions needed to the redraft text or can I assume it has been approved by the sponsor and a vote on such is thus called for?

[President Tyrion]

Wait, I have revisions. Since we're in the redraft process, TNF would have to decide whether he wants to send my version back or just the redrafted version, right? In any case, I believe this amendment is fairly uncontroversial. I believe I misunderstood the President's redraft initially, because Clause 5 is specifically for people who opted in to the compensation adjustment, so hopefully my amendment reflects that newfound understanding.

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2. The minimum wage for tipped employees shall, upon the passage of this legislation, automatically adjust for increases in worker productivity and inflation at the same rate as does the regular federal minimum wage. The previous chart shall not be construed to deny a minimum wage adjustment based on inflation or increases in productivity to any employee.

3. The scaled increase to the minimum wage for tipped employees, as noted in Section 1 shall expire on January 1, 2020 and the tipped minimum wage shall, at that point, be equalized to the regular federal minimum wage. There shall, from January 1, 2020, be no difference in the federal minimum wage for tipped and other employees.

4. From the period between January 1, 2014 to January 1, 2020, tipped employees may 'opt-out' of the compensation adjustment for tipped employees. In doing so, tipped employees shall be paid the previous federal minimum wage for tipped employees until the next scheduled increase, at which point they will be once again asked by their employer whether or not to 'opt-out' of it.
   4a. Tipped employees having opted out of the compensation adjustment schedule shall be paid a gratuity of 20 percent automatically charged on all purchases by any employer employing tipped employees foregoing the compensation adjustment schedule.
   4b. Effective January 1, 2020, the opt-out provision of this law and the automatic gratuity charge shall be terminated and all employees currently paid in tips instead paid the federal minimum wage.
   4c. Employers may not deny the right of employees to opt in or out of a tipped compensation program. Denying a worker such a right is punishable by law and may result in the loss of one's business license and/or a fine of up to $25,000 per denied employee.
   4d. Employers and employees must indicate the form of compensation on tax documents from any jurisdiction. All jurisdictions must recognize both forms of compensation for currently tipped employees.

5. Restaurants shall not charge a service charge exceeding X% on services rendered by employees who have opted in to the compensation adjustment program. The value of X will be determined by the following chart, with each date meaning that the maximum service charge will be X% until the next listed date, or indefinitely if there is no next date.

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[/quote]

[TNF]

Excellent work, I'd deem that friendly if the President is down with it as well.

[Southern Senator North Carolina Yankee]

This is the required process established in the Constitution.

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bold = Stage 1
italics = Stage 2

Stage 1:
Senator TNF, you may file a motion to approve the redraft by a simple majority vote or withdraw the bill.

If you choose the former and the redraft is rejected, you will have opportunity in stage two to resume debate or send the original version back to the President.

[Southern Senator North Carolina Yankee]

I am assuming minor revisions by the President are acceptable but at some point the President has to say this is the redraft text and the sponsor then has a choice between a vote on that or withdrawal. If the vote fails, he then send it back to the President in original form or motion to resume debate.

[President Tyrion]

Hm, in that case, we should vote on and reject the redraft, resume debate, assess my amendment, and then send it back to the President. I do think my amendment is necessary.

[Fmr. Pres. Duke]

Okay, let's just reject this redraft and resume debate if that's what we have to do. I'm unclear on the process honestly.

[President Tyrion]

Okay, let's just reject this redraft and resume debate if that's what we have to do. I'm unclear on the process honestly.

Well, if you like my amendment, you could just pretend it's your amendment and make it part of your redraft. That's kosher, right?

[Fmr. Pres. Duke]

The only problem I have with your amendment is with the 5th point.

The way I am understanding the business model of European restaurants/service positions is, the restaurants charge a service fee instead of asking patrons to tip. They use this fee to fund the salaries of their employees.

I don't think it's plausible for us to eliminate BOTH tipped positions and forbidding restaurants to charge a service fee while demanding they pay their workers minimum wage. If we did that, we would do a lot of harm to the industry and put a lot of places out of business. The profit margin for restaurants is already pretty thin, around 1-2%, and that's with the current system.

[President Tyrion]

The only problem I have with your amendment is with the 5th point.

The way I am understanding the business model of European restaurants/service positions is, the restaurants charge a service fee instead of asking patrons to tip. They use this fee to fund the salaries of their employees.

I don't think it's plausible for us to eliminate BOTH tipped positions and forbidding restaurants to charge a service fee while demanding they pay their workers minimum wage. If we did that, we would do a lot of harm to the industry and put a lot of places out of business. The profit margin for restaurants is already pretty thin, around 1-2%, and that's with the current system.

Hm, with more consideration, I think you might be right. How about we put back the 15% standard, then?

[Fmr. Pres. Duke]

The only problem I have with your amendment is with the 5th point.

The way I am understanding the business model of European restaurants/service positions is, the restaurants charge a service fee instead of asking patrons to tip. They use this fee to fund the salaries of their employees.

I don't think it's plausible for us to eliminate BOTH tipped positions and forbidding restaurants to charge a service fee while demanding they pay their workers minimum wage. If we did that, we would do a lot of harm to the industry and put a lot of places out of business. The profit margin for restaurants is already pretty thin, around 1-2%, and that's with the current system.

Hm, with more consideration, I think you might be right. How about we put back the 15% standard, then?

That works for me. Whatever bill we decide on, I want to make sure we aren't screwing thousands of small businesses in the process. Most restaurants are not cash cows. We have to keep that in consideration.