St. Paul service workers call for tip credit in minimum wage debate

Servers, bartenders, and restaurant owners met at St. Paul's Happy Gnome last night for the second in a series of meetings on a proposed tip credit.

Servers, bartenders, and restaurant owners met at St. Paul's Happy Gnome last night for the second in a series of meetings on a proposed tip credit. Courtney Perry/Star Tribune

“We’re not asking for more. We’re asking for what we already have.”

Michaelann Gillis is a career server. She works 25 hours a week and is able to take care of her young daughter because of the money she earns and the tips that accompany it.

During a Monday night listening session at The Happy Gnome organized by Gillis and Jennifer Schellenberg -- a career server as well -- service industry workers gathered to hear testimony on the desire for a tip credit in a potential $15 minimum wage ordinance similar to the one passed by Minneapolis City Council in June of this year.

So, what’s a tip credit? Because a proportion of full-service workers (not, say, a part-time barista earning a few bucks in tips an hour) earn a considerable amount in tips, they want those to be counted as income in the $15 minimum wage debate. Currently, many servers make well above $15 an hour, some as much as $30 an hour. What Schellenberg and Gillis are proposing is an exemption in the $15 minimum wage ordinance that maintains a $9.50 an hour base wage for all full-service workers, plus their tips.

Mandating an across-the-board $15 wage for hourly workers could decrease tipped workers’ earning potential and create hardships for business owners. While it would nominally push up wages in the back of house, owners would still have to find that money in a business with already slim profit margins.

Jamie Robinson, owner of Northbound Brewing Company, talked about how he dealt with the increase in the state minimum wage from $7.25 an hour to $9.50, which meant he needed $50,000 more a year to run his business. He shrank the menu, raised menu prices, eliminated half-price meals for staff, got rid of the summer employee party, laid off three cooks, scheduled longer shifts, added a catering service and food truck to diversify revenue streams, and more. Even so, he found that revenue was stagnant. More customers came to the restaurant for happy hour than full dinner service. And because revenue was stagnant, wages for both front-of-house and back-of-house didn’t increase as much as he would have liked.

No one is against the $15 minimum wage -- Schellenberg, Gillis, and all the speakers made that clear. But for them, applying such an ordinance without considering the nuances of the service industry is misguided. Graham Messenger, executive chef at Fitzgerald’s, talked about why he supports the tip credit. Servers, he finds, are passionate people who work long and hard to hone their craft and sharpen their skills. If those servers can’t maintain their lifestyle and the wages they’re pulling in, they might leave for other cities or other industries. “Then the people representing my food will be, like, high schoolers,” he said.

There was a lot of talk about the love of providing hospitality and taking care of guests. And there was also testimony from Adam Borgen, a bartender at Smack Shack, about the perks of making as much as $70,000 a year, having a flexible schedule, and the freedom to make specific career choices.

Other speakers addressed the potential of restaurants taking away tipping altogether and simply tacking on a service charge to a guest’s bill. Matt Gray, a server at W.A. Frost, explained why that system doesn’t address the tipped workers’ concerns: While a tip is legally considered a gift from a guest to a server and therefore belongs solely to the server, a service charge legally belongs to the business owner. The owner would collect all money made from the service charge and decide how to redistribute it to their staff. Some servers are concerned that such a practice could lead to owners lining their pockets, diverting service charges from workers. Robinson, of Northbound Brewing, was also against the service charge. “Why would you want me to take those tips?”

Each speaker urged those assembled to talk to their coworkers, their bosses, their non-industry friends, and, crucially, their city council members about the need for a tip credit for full-service, tipped workers.

What attendees didn’t hear was an argument from the other side against the tip credit or testimony from a server working in a restaurant where they didn’t pull in $15 or more an hour in base wage plus tips. Would a tip credit help or hurt those servers? Would a tip credit perpetuate a tipping culture that can feature sexual harassment from guests? Would a tip credit perpetuate an industry that doesn’t offer its workers 401(k)s or healthcare benefits?

This was only the second listening session on the subject. Schellenberg and Gillis have plans to amplify their cause and have already had or set up meetings with Saint Paul’s city council members and mayor-elect Melvin Carter III.