Senator Roger Katz Seeks to Restore Tip Credit

Contact:
Krysta West
Communications Director
Senate Republican Office
(207) 287-1505
krysta.west@legislature.maine.gov

FOR IMMEDIATE RELEASE

AUGUSTA – State Senator Roger Katz (R-Kennebec) has sponsored LD 673, “An Act To Restore the Tip Credit to Maine’s Minimum Wage Law.”

This bill, with co-sponsors from both sides of the aisle, seeks to reverse a provision that was included in Question 4 on last November’s ballot. The law passed by Question 4 is threefold – it will incrementally raise the minimum wage by 60 percent until it reaches $12.00 per hour in 2020, it raises the wage that tipped employees receive each year until it reaches the full minimum wage, effectively eliminating the tip credit and it indexes the minimum wage to inflation.

If passed, LD 673 would reinstate the tip credit portion of this minimum wage law.

“Of all the things going on in Augusta, the tip credit is one of the issues that I’ve heard the most about from constituents and restaurant owners in my district,” said Sen. Katz. “That’s because this new law fundamentally changed the server-customer dynamic in restaurants all across Maine and is already causing some significant misunderstandings. Proponents of this provision sold it to the voters as a way to increase wages for these individuals, but it has actually decreased wages in many cases as customers have begun to tip less, resulting in a much lower hourly wage.

“The elimination of the tip credit is also detrimental to restaurant owners, who already operate on razor thin margins. It is already forcing them to raise prices, reduce hours, eliminate benefits, reduce pay for back-of-the-house staff, switch to a computerized business model, eliminate positions or take a significant hit.

“Many Mainers have earned a very decent wage working in restaurants and bars for tips which are often times significantly higher than the minimum wage. But this new policy threatens that, hurts our businesses and will result in higher menu prices and a lower quality in service for the consumer.”

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