‘Sub-Minimum’ Pay for Tipped Employees Hit by Suit
A coalition of public-interest groups and labor leaders filed suit in the state Court of Appeal in Sacramento on Wednesday attempting to block the July 1 imposition of a “sub-minimum” wage for employees who receive tips.
The suit was announced at press conferences in Los Angeles and in San Francisco. The case was filed in response to a Dec. 18, 1987, action by the California Industrial Welfare Commission. On that day, the five-member Commission approved, 3 to 2, an increase in the state minimum wage from $3.35 an hour to $4.25.
But the commission, also on a 3-2 vote, created a sub-minimum wage of $3.50 an hour for California employees who customarily receive at least $60 a month in tips. The suit contends that creation of the new wage violates a state labor code section that expressly prohibits the creation of a tip credit against wages.
Lawyers for the plaintiffs also asserted that the sub-minimum wage would have a disproportionately adverse effect on minorities and women--citing recent federal Bureau of Labor Statistics information showing that more than 80% of all restaurant food servers are women.
“The wage inequities are clear,” said Fran Bernstein, an attorney with the Legal Aid Foundation of Los Angeles. “A full-time employee at the new $4.25 minimum wage will gross $8,840 per year. An employee working full-time at the $3.50 sub-minimum wage who earns $60 in tips will only earn $8,000 per year. This action necessarily punishes those least able to afford it--busboys, car washers, doormen, waitresses,” she added.
The suit asks for a declaratory judgment invalidating the creation of the sub-minimum wage and asks that tipped employees start receiving the $4.25-an-hour minimum wage at the same time as other California employees.
Karla Yates, executive officer of the Industrial Welfare Commission, declined comment on the suit Wednesday. At the December hearing, Lynnel Pollock, a Woodland farmer who heads the commission, said a separate wage structure for the state’s nearly 100,000 tipped employees was justified because the average employee in California in that category makes $8.43 an hour when tips are counted.
Questions Basis of Data
“I would question the scientific basis of the data, which came from the California Restaurant Assn.,” Bernstein said. She said a number of small restaurants are not members of the association and that workers at larger, more expensive restaurants would tend to get larger tips, thus skewing the results of the survey.
Plaintiffs include seven workers who make part of their living through tips; Welfare Action, a Los Angeles organization of low-income people; the California Labor Federation (AFL-CIO), and John F. Henning, the federation’s executive secretary-treasurer. In addition to the Legal Aid Foundation of Los Angeles, lawyers from the Western Center on Law and Poverty; the Asian Law Caucus; the Employment Law Center; Equal Rights Advocates, and the American Civil Liberties Union joined in preparing the brief.
