Love Trumps Yelp Coward’s Hate at Boston’s Zia Gianna Italian Bakery & Cafe in Dorchester, MA

By: Patrick Maguire

Book Chapter: Customer Hall of Shame

Posted: 8/13/2018

Let’s get right to the cowardly curmudgeon’s Yelp review:

I’m appalled a little more every single time I read this horrific, bigoted, hate-filled tirade.

After reading this review on the Zia Gianna facebook page, I contacted the owner, Nino. I wanted to confirm that the laudatory comments on facebook were true, and I needed to verify a few items. Nino struck me as a very genuine man with a good soul. He confirmed that the following words on facebook accompanying the Yelp review received his blessing, and reflected who he is and what his restaurant represents:

“All are welcome at Zia Gianna, even this gentleman. We’d love to show him some kindness from the LGBTQ community because love always wins.”

Nino is a very easy man to talk to, and I believed him when he told me that he “welcomes everyone, and loves the diversity of our Dorchester neighborhood. We love serving everyone.” He is a proud, gay, married man, and his staff is comprised of folks from a wide range of ethnicities, races, religions, and sexual orientations. He said, “it just happened,” and that he didn’t deliberately assemble a staff with diverse backgrounds. He also confirmed that the review was not a “plant” for PR purposes. (I had to ask.)

Nino works front of the house, interacts with most of the guests, and could not recall an upset customer who fit the profile of the vile (my word), “Restaurant T.” Yelper. A little more about our anonymous Yelper friend:

He’s Sicilian. No doubt, just read his Yelp reviews of other restaurants. Here are a few excerpts of his greatest hits (my highlights):

I’m Sicilian, and I usually cook my own food, and therefore I’m entitled to measure how well a Restaurant stands up to the quality of how me and my family prepare our Traditional Cuisine. A lot of places skimp so much on ingredients that most people have no idea how the dishes are really supposed to be prepared.” (Ok, Mr. T…)

“Most of all the other Italian Restaurants in the North End are NOT authentic Italian and they are often “Fusion Style Italian” restaurants which employ either American, French or other influences into their cuisine and sell you small bites at ridiculous prices where you leave hungry for a whole new plate somewhere else.”

“Now that being said, I am not Puerto Rican, I am Sicilian and we are also an Island Nation and have some of our own fried items, BUT even I can tell that this ISN’T Puerto Rican food.”

“This place was one of Boston’s BEST Restaurants in my opinion, and now it’s gone downhill to be worthless just like all the rest of them.”

“This is definitely the BEST place to go for Italian sandwiches in the area (and even better than anything you can get in Boston’s North End), particularly their Meatball and Italian Subs… A lot of places have horrible meatballs (most Americans don’t know what a good Meatball tastes like), I am Sicilian and the way they make their meatballs here for a sandwich they are absolutely perfect and seasoned well and they stay together and taste so good in the Sandwich! “

I sent him the following note via Yelp messenger:

Hello, “Restaurant T.” – I’m writing to inform you that I am publishing a blog post that will include screenshots of your hateful review of Zia Gianna. I almost always try to give folks mentioned in my posts an opportunity to tell ‘their side’ of the story. Is there anything you regret writing in your review? Is there any additional message you have for the owner, staff, or customers that you’d like me to include in my blog post? Thank you-Patrick

[No response as of this publication. I will update if he replies.]

I learned one more thing about Nino when I spoke with him today…

“Restaurant T.” stated: “Anyone who violates our time tested Traditions and Iron-Clad rules of maintaining Roma Invicta, should be stripped of citizenship and even their surname reflecting our heritage.”

In fact, Nino will become a US citizen at a ceremony at Faneuil Hall in Boston on Thursday, August 16th. Please join me in congratulating him in the comments below. Better yet, stop into Zia Gianna and congratulate Nino in person.

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If you are interested in supporting the Server Not Servant blog and helping to expedite the book project, please see the blue box on the right hand side of this blog post to make a contribution. Cheers-PM

 

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Twitter Tit for Tat on Tipping Etiquette 2018

By: Patrick Maguire

Book Chapter: Human-to-Human Service

Posted: 8/12/2018

I shy away from redundant posts about tipping here and on the Server Not Servant facebook page because tipping is not the primary focus of this project. However, we haven’t discussed tipping etiquette in a long time, and Christopher Muther, travel writer for the Boston Globe, wrote a “Help Desk” piece on 7/31/18 that was spot on.

The piece‘If they touch it, you tip it’: The definitive guide to tipping while traveling, included some recommendations for tipping concierges:

There are general tipping guidelines for all US travel services, but, according to etiquette expert Elaine Swann, if a concierge secures you an otherwise impossible show ticket, or a restaurant reservation in an eatery that is fully booked, consider going higher. Swann said consider at least $20 depending on the scale of the task. Ditto for others who transform your trips from exasperating to extraordinary.

And at the end of the piece:

With the help of etiquette experts, the American Society of Travel Agents, and the American Hotel & Lodging Association, we’ve assembled a handy guide for tipping while traveling in the United States. Remember to do your research before traveling overseas.

Who and how much to tip:

• Concierge

Tip from $5 to $10 depending on how involved the request, or a lump sum upon departure. Consider tipping higher if the concierge has gone above and beyond to procure something special. No tip is necessary for directions or an answer to a simple question.

The Boston Globe writer, Christopher Muther tweeted a link to the piece w/the message, “Ever wonder how much to tip the chamber maid? The hotel concierge? Wonder no longer! Here’s your guide to tipping while traveling.”

A Twitter Guy (TG) responded, “1) You didn’t touch upon the pervasive negative aspects of the American tipping culture. 2) You perpetuated the ridiculous idea that people (concierges) ALREADY paid generously to literally sit on their ass & provide help to paying hotel guests should be tipped. Seriously?!”

Christopher: “Hi, TG. I agree there are issues with American tipping, however this article is intended to inform people of how to tip while traveling rather than diving into the politics of tipping culture. That is definitely an entirely different story. This story is the opinion of experts.”

TG: “Christopher, that’s definitely a fair point, and thank you for at least consulting other experts vs. self-interested groups like the restaurant association, concierge assoc., etc. I hope you’ll cover the other story as well.”

Patrick Maguire (PM) response to TG’s original tweet about concierges, “What a sweeping, negative generalization about concierges. And I believe the article did an excellent job of acknowledging many issues that require a deeper dive, like tipping in America.”

TG: “Patrick, I’d welcome your thoughts on why concierges should get tips for doing their job. Do they make at least minimum wage? Also, please explain why flight attendants, teachers, bus drivers, nurses shouldn’t be similarly tipped for their work.”

PM: (in 10 tweets): “The best concierges I have spoken with while researching my #ServerNotServant blog/book project don’t expect tips because many of them are paid well over minimum wage. However, many seasoned concierges have cultivated a network over a lifetime allowing them to tap into their resources to provide the best restaurants, reservations, recommendations, tickets, tours, guides, events, and services their city/town has to offer. Folks who voluntarily tip a concierge realize that they are leveraging the goodwill that excellent concierges have cultivated. 

I believe that savvy travelers recognize that an experienced concierge can save them a lot of time, effort, and energy, and deliver results that exceed what they might have been able to produce themselves. They choose to show their appreciate via tip because of the access a concierge provides them to vendors in their city, the US, and around the world that they might not have via their own network. And I believe that the article and advice is accurate in that it states at the outset that “Tipping is completely voluntary,” and then proceeds to explain that the “guide for tipping” is a result of consultation from multiple sources.

What was recommended 4 concierges in the article, strikes me as well traveled, common sense, common decency, spot on advice. The only real “social contract” around tipping in America is for folks who are paid a tipped minimum wage, as I’m sure you are aware. That doesn’t preclude us from demonstrating our gratitude w/cash when hospitality, empathy, compassion, anticipation or reaction strike us as timely +/or exceptional, especially if we’re a little flush with cash after cashing a check or getting paid. And that can include flight attendants, bus drivers, teachers, or nurses. Some circumstances and employers may not allow cash and a little creativity in the form of gift certificates or gifts might be more appropriate.

I remember bagging groceries on hot, humid days like today (8/6) in Boston at DeMoulas in Billerica, MA in the 70’s and pushing/pulling 2 overflowing carts to a customer’s car, and carefully loading up the car. A buck or 2 was always greatly appreciated, but you learn not to expect it. That’s often what makes giving gratifying, when folks don’t expect it. Most service industry workers I’ve spoken with aren’t even looking for anything ‘extra,’ they just want everyone to be decent, kind people, and to be respectful. Thanks for asking. I initially jumped in because I disagree with your outrage at the article ‘perpetuating’ the notion of tipping concierges for ‘sitting on their asses.’ Obviously, in many instances, they’re doing a lot more than that, and it’s ok to show our gratitude if we choose. Cheers.”

TG: “Thanks, Patrick, for offering a thoughtful and detailed rebuttal to my admittedly snarky take. I do think our different take on this may be irreconcilable, however, due to opposing philosophies. You feel that showing appreciation for high effort/high expertise is appropriate in monetary compensation. I feel that this ironically cheapens and debases human interactions, and that gratefulness expressed in other ways is more noble and across industries, more fair.

PM: “Please elaborate on expressing gratitude in other, “more noble” ways than “debasing human interactions” with monetary compensation. I’m all for seeking someone out to thank them, talking to their boss, and/or writing a letter or review singling out their ‘high effort.’ I also believe that there’s nothing wrong with the gesture of cash, gift, or gift certificate in the examples I mentioned regarding concierges, teachers, flight attendants, + nurses. My hunch is that the service industry folks wouldn’t feel demeaned. 2 more hypotheticals–If a consumer receives multiple packages a week from online orders and their USPS delivery person does a great job placing the packages exactly where they want them, is it demeaning to give them a card and cash or a gift occasionally or at year end? If you clean your house and leave an unusually huge pile of trash on the curb on pick-up day, is it demeaning to offer the trash crew some cold cash on a hot day? Bonus, if you freak out about going to the dentist (raises hand), and your hygienist uses novocaine and/or topical anesthetics, is it demeaning to give them a card with a gift certificate to their favorite restaurant or retail store at the end of the year? My gut says that if presented properly, most service industry folks would not be offended at a kind gesture that includes compensation.

TG: “I perceive the act of giving money to someone for doing their job inherently a power play, a way of saying, ‘Here, peasant, have a few coins from me, a person in a position of power over you.'”

PM: ” It’s not when a customer in America adheres to the unwritten, but well known social contract of tipping when compensating workers who are paid a tipped minimum wage, like bartenders + servers. In my opinion, it’s a lame ‘power play’ to say, “I don’t (have to) tip,” a la Mr. Pink.”

TG: ” Have you spent time in Japan? It’s so enormously refreshing going out to dinner there. Customers get wonderful service and, in turn, seem to typically show high respect to their servers. No tipping.

PM: “No, but I’ve spent time in Australia where the custom is not as ‘rigid’ as Japan. Australia reminds me of the “tipping included” restaurants in America that have a line on the receipt to include a tip on top of the ‘total,’ similar to Uber and Lyft.”

TG: “I do prefer the AU method to the US method; at least waitstaff are paid a decent base wage there, and tipping isn’t essentially *required*.

TG: “Read up on the sad history of tipping. Read the research on how it exacerbates sexism, discrimination (hint: white women with big breasts make hugely more in tips that short Hispanic guys, and undoubtedly get sexually harassed a lot more, too.)”

PM: “I’ve been living and/or ‘reading up’ and studying tipping for more than 40 years. A lot of the sources of the cherry-picked data + studies regarding the origin of tipping + commingling w/sexual harrassment need to be scrutinized very carefully. More here: https://bit.ly/2ALGbIo”

TG: “Regarding questions about the sexual harassment link…thanks for sharing that page.”

TG: “Also, in real life, nurses do not get tips and (from what my nurse friends tell me, almost never get gifts. My dad–repeatedly Teacher of the Year–probably got an average of 1 gift a year, if that. So tipping is inherently unfair occupationally as well.”

PM: “Thanks for the ‘real life’ lesson. I never said nurses get tipped. And as far as gifts, speak to more nurses, especially those in Oncology or Geriatrics. My father + 6 siblings taught school for a living. Their experiences of gratitude from parents differ from those of your dad.” 

TG: “Lastly, re: delightful surprises… I’m all for it! I gave a big gift card to a server in Singapore once because she was so astoundingly awesome to me. But that’s the opposite of the 20% tip, or “you should give $10 or more to your concierge when…” guidance. PS-You are awesome for doing things like putting in a good word to someone’s boss or writing a letter, review. I am 110% with you on such gestures! I need to do this more myself; I think it’s a powerful gesture and selfishly it makes me feel happy, too :-)”

PM: “I’m with you about letting workers (and their bosses) know when they do a great job. It’s not that hard, feels good, and often takes a lot less effort than the energy that some people expend to complain. Unfortunately, some people aren’t ‘happy’ unless they’re miserable…”

TG: “By the way, I *do* tip generously in restaurants, historically because of the tipped minimum wage, but now out of social pressure in non-tipped-min-wage states :p. And lastly, I’m glad we can both agree re: the awesomeness of unexpected kind gestures to recognize outstanding service… and I think a reasonable consensus on top of that might be that we both hope for a day when no one DEPENDS on tips for their livelihood :-).

PM: “I do hope that, and I thought that Danny Meyer’s ‘hospitality included’ at USHG in NYC was going to add momentum to that movement. The early ‘mixed’/troubling results indicate that American workers, consumers, and culture just aren’t ready for full adaptation of that method. And lastly, like stories, some blog posts ‘write themselves.’ I’ve enjoyed the repartee and have screenshots of every tweet. In the blog post, do you prefer your full name w/link to your twitter or anonymity with a code name? I won’t use ‘Mr. Pink’…” 😉

TG: “Hey, Patrick, it’s been a pleasure…I prefer my tweets not live forever, …at least not with my name on ’em. So if you’d be willing to anonymize them, that would be awesome; thanks! 🙂

It was refreshing to have a ‘conversation’ on social media that included disagreements and testy exchanges result in civil discourse rather than devolve into vitriolic rage followed by blocking each other. Thank you, Twitter Guy.

PS: “Twitter Guy” did apologize for painting all concierges with one brush. That’s the only tweet I didn’t take a screenshot of.

If you are interested in supporting the Server Not Servant blog and helping to bring the book project to fruition, please see the blue box on the right hand side of this blog post to make a contribution. Just don’t call it a tip… Thank you for your consideration. And please join in the conversation in the comments below, and share this post on social media if the spirit moves you. Cheers-PM

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Is Lobbyist ROC United’s ONE FAIR WAGE Really FAIR for All Workers? Tip Credit and Tipped Minimum Wage-Part 2

By: Patrick Maguire

Book Chapter: Human-to-Human Service

Posted: 8/6/2018

There are several updates since Part 1 of this series examining the tipped minimum wage and ‘tip credit’ legislation impacting American workers, restaurants, and consumers.

#1- Washington D.C.

June 19, 2018 from Axios: “Voters in Washington, D.C. approved a ballot initiative, known as Initiative 77, Tuesday that will gradually increase the $3.33 “tipped wage” for restaurant servers and bartenders to match the city’s minimum wage, currently $12.50 per hour, by 2026.

Why it matters: D.C. has become the latest battleground over minimum wage for tipped workers in the restaurant industry. The industry, which opposes the measure, argues that the initiative would force businesses to cut employee hours, pay, and jobs. But advocates and labor rights groups say it will help workers who are currently at greater risk of wage theft, and that they would no longer have to rely on tips from customers as a steady income. 

What’s next:  The D.C. Council — whose members are mostly against the initiative — could pass a measure to overturn the result or make changes that would address concerns raised by both sides.”

Washington City Paper – July, 2,2018After Initiative 77 Passes, Workers Say Customers Are Confused About Tipping:

If Initiative 77 is enacted, the tipped minimum wage will go up in eight increments until it reaches $15 in 2025. From 2026 onward, there would be one wage for all workers. But that hasn’t happened yet. While the “yes” votes led “no” votes 55 percent to 45 percent on election day, nothing is official. 

Because of its unique relationship with the District, Congress has a chance to interfere with the measure during its 30-day review period for D.C. legislation. Even if Congress doesn’t act, the D.C. Council could overturn the measure. A supermajority of the 13-member Council, Attorney General Karl Racine, and Mayor Muriel Bowser oppose 77. A similar referendum passed and was then overturned in Maine in 2017. 

“Ever since it passed, there have been more than a few [people who haven’t tipped],” says Kingfisher bartender Peter Pruitt. “I understand during the course of a shift, you get some people that do not tip generally. But it’s more prevalent. I had two customers that said, ‘Hey man, sorry 77 passed, you’re not getting a tip.'”

Joey Allen, who works some shifts as a manager and other shifts as a tipped worker at Jake’s American Grill in Chevy Chase, has also seen a handful of receipts with zero tips since June 19. One was for $53, another $31. “They’re thinking that they voted to abolish tipping,” Allen says, referring to customers. “One woman said, ‘Thank god I don’t have to tip anymore.'” Another said, “This initiative just passed, so I didn’t put a tip on there,” according to Allen. 

Joseph Hudson bartends at Nellie’s Sports Bar. He says he’s been serving people who leave no tip for years, so he can’t firmly blame 77 for him being shorted a few times since the election. He has two receipts that show zero tip on checks for $20 and $16. “It’s hard to tell, but 77 definitely muddies the waters,” Hudson says. “I presume some people think the situation is resolved—that I get $15 an hour now. But that’s not the case. I think people are really confused.” 

According to the Washington Post on 6/20/18, “Before Tuesday’s vote, 10 out of 13 council members opposed the measure, as did the mayor. One of those members, David Grosso (I-At Large) even urged opponents to apply pressure on the council to overturn the measure if it passed.”

The initiative did pass, and the D.C. Council then moved to enact legislation to repeal it.

Washington Post July 10, 2018:

A majority of the D.C. Council on Tuesday backed repeal of a ballot measure approved by voters last month that would force businesses to pay more to servers, bartenders, bellhops and other hourly workers who depend on tips.

Seven of the council’s 13 members co-introduced a bill that would overturn Initiative 77, which was passed by 56 percent of District voters in June’s primary election.

With the council about to break for a summer recess, the repeal legislation will not advance until the fall. It was nevertheless an ominous development for supporters of Initiative 77, who have suggested they may be willing to compromise with opponents rather than face a total repeal.

July 24, 2018 ROC United Monthly e-news response:

One Fair Wage Updates:

DC – DC Initiative 77 won with nearly 56% of the vote. Now the hypocritic DC Council wants to overturn its own people’s vote. It’s nothing more than an undemocratic black voter suppression. ACTION: Tell the Council to respect the will of the voters.

On July 27, 2018, the facebook page, No2DC77 , supporting repeal of the initiative, posted the following graphic:

The caption to the graphic reads: “In 2014-2015, Initiative 77 sponsor group ROC-United received $1.1M in funding for its ongoing outsider attempt to outlaw the tip-wage system in DC – merely part of $Million$ fueling an effort opposed by tipped workers.” [Below in this post, I  asked ROC for confirmation of these grants and a breakdown of how much money they have spent lobbying in each state. I also emailed all of ROC leadership to notify them of this blog post, the unanswered questions from Part 1, and the requests for information herein.]**

 It will be very interesting to see if the outcome in MA influences the pending decisions in D.C., New York, and Michigan…

#2- Massachusetts.

The Legislature passed the “Grand Bargain” with the MA House vote of 126-25 and Senate vote 30-8 on 6/20/18. The phase-in of the tipped minimum wage from $3.75 (current) to $6.75 on 1/1/23 is a very reasonable compromise. The original legislation called for $15.75 tipped minimum on 1/1/25, then elimination of the tipped minimum wage and tip credit altogether. ROC supported the original legislation with their One Fair Wage and ‘High Road’ campaign. The Raise Up MA ballot initiative originally proposed a gradual increase of the tipped minimum wage to $9, but on 6/7 sent a letter to Senate President Chandler and Speaker DeLoe proposing tipped min wage at 50% of the full minimum wage, retaining the tip credit for restaurant owners. Here are the new, scheduled phase-in increases of the tipped minimum wage for Massachusetts:

Noteworthy is the change that “Workers must make at least minimum wage for each shift worked (rather than pay period as required under current law).” It is also very important to note that Raise Up MA made a decision to drop the tipped minimum wage ballot initiative, provided that MA Governor Charlie Baker signed the “Grand Bargain” compromise into law by July 1. On Thursday, June 28, Governor Baker signed the legislation into law.

From Mass Live, “By 2023, Massachusetts will be tied with California for the state with the highest minimum wage in the country, unless other states follow suit. Washington, D.C. and New York have also passed a $15 minimum wage, but New York’s law will go into effect more gradually. The [full] minimum wage will increase gradually, from $11 today to $15 on Jan. 1, 2023. There will be a lower increase for tipped workers, from $3.75 today to $6.75 by 2023.”

The tip credit in MA will remain intact, which pleased many servers and owners of full service restaurants who have been carefully following the legislation.

Katie Johnston in the Boston Globe-June 21,2018: “$15 minimum wage, mandatory paid leave remain rare.” From the piece:

“The wide-ranging “grand bargain’’ bill emerging from Beacon Hill would make Massachusetts just the third state in the country to approve both a $15 minimum wage and mandatory paid family and medical leave.

The bill, which the Legislature passed Wednesday, would also impose a small payroll tax on workers and employers to pay for the paid leaves of absence.

As the provisions in the legislation became public, business owners worried that they would have to raise prices, cut employee hours, or possibly even close their doors. Workers, on the other hand, rejoiced at the prospect of more money in their paychecks and a greater ability to care for family members in need.

Paid-leave requirements — which allow employees five months off for medical reasons and three months to care for a new child — could also cause complications for employers who need to fill the gaps while employees are away.”

The cost and length of paid family and medical leave in MA is a concern with the independent restaurant owners I communicated with. They note that menu prices could rise significantly to cover the costs, and several full-time positions may be eliminated in favor of part-time positions. From a veteran restaurateur I exchanged emails with shortly after the legislation passed who requested anonymity:

“As an operator in an industry with razor thin margins we just do not have the extra capital to conduct social experiments. All of us are having a difficult enough of a time handling all of our current expenses. Higher prices will fix all of this and that is where we will be in several years. The $64,000 question is which restaurant/s will be the first to raise them? Once enough competitors raise their prices the rest will follow.

I remember the airline industry had a very tough time making money for a long time. Then one day a few years ago, one raised their prices and then they all did. They put fewer flights in the air. All the planes are full now. They make money. We get where we need to, though it costs quite a bit more. As a hospitality guy, I of course want to see these things work out for everybody and manage to have some profit at the end of the day!”

I attended a rally at the Massachusetts State House on June 12th organized by Andrew Farnitano and Raise Up MA, the folks behind the original ballot initiative to raise the tipped minimum wage to $9/hour on 1/1/22. There were about 20 people gathered around the designated rallying area waiting for the marchers and chanters to arrive when a woman repeatedly yelled, “Do we have any servers or bartenders here?” No one raised their hands. A few minutes later, a group of about 30 people came marching down the hall carrying this banner:

All of the speeches and chants led onlookers to believe that servers and workers making the current, tipped minimum wage of $3.75 were expected to ‘survive’ making only $3.75/hr. It was never mentioned that all servers are guaranteed the full minimum wage, which is currently $11/hour in MA on the way to $15. (And that is the same in every state that an increase of the tipped minimum wage is being debated.) Tipped workers are guaranteed the full minimum wage that their state mandates. One MA server at the rally stated that he was afraid to speak up if his employer neglected to pay him the full minimum wage because he didn’t want to be retaliated against with reduced or ‘bad’ shifts.

Failure to pay tipped workers the full minimum wage (wage theft) is illegal everywhere. We are in the midst of a “buyer’s market” for restaurant industry workers. Staffing shortages are one of the biggest challenges facing restaurant managers and owners today. It’s one of the best times in history for restaurant industry workers looking for jobs. Unless servers are working in an isolated, rural area with only one restaurant within several miles, they need to speak up, report the restaurant in violation of wage theft, and move on to another job. And even if a restaurant is the only show in town, there is legal recourse to address wage theft. The martyrdom and deception at the sophomoric MA rally truly undermined the Raise Up MA cause for observers who have done their homework. It’s unfortunate, because I believe that, in theory, their cause is noble.

I met Andrew Farnitano, a key member of the Raise Up MA coalition after the rally. Andrew was extremely cordial and has always been very responsive when I have emailed him for information or comments for blog posts. He informed me via email a few days later that no one participating in the rally was paid to participate as I had speculated.

It is interesting to note that in a letter that Raise Up MA sent to MA legislative leadership on 6/7/2018, they proposed a $15 full minimum wage with a 50 percent tipped credit, or corresponding $7.50/hr tipped minimum wage. That is down from the original ballot initiative of a $9/hr tipped minimum, and a little higher than the $6.75 tipped minimum wage that was eventually signed into law.

I also think it’s very important to note that Raise Up MA never proposed $15+/hr (ROC “ONE FAIR WAGE”) eliminating the tip credit and the tipped minimum wage that ROC United lobbied for.

Two nagging questions have been haunting me since I started digging deeper into these issues (and these apply to all states and groups considering changes to the tipped minimum wage):

A- If tipped workers are already guaranteed to make the prevailing full minimum wage, despite the lower tipped minimum wage, why change the current law? Who wins besides the states making more money in payroll taxes? Why not just enforce current ‘wage theft’ laws more aggressively?

B- How many independent, established, medium to large, full service restaurant operators have legislators, lobbyists, and interested parties consulted with to review their current Profit and Loss numbers, and the projected impact of the minimum wage increasing from current to $15 (or whatever proposed)? Out of all of the restaurant operators they spoke with, how many supported an increase in the tipped minimum wage above 50% of the full minimum wage?

A reliable source familiar with the negotiations at the State House told me that hundreds of MA restaurant operators proactively reached out to educate MA legislators on the impact of an increase in the tipped minimum wage, and that made a significant difference in the outcome.

In an email exchange I had about financial modeling with Nai Collymore-Henry, VP of Partnerships at The Alliance for business Leadership, I stated that MA restaurateurs are operating in an environment where thousands of seats and units have been added over the last few years, and competition for staffing is at an all-time high. And before anyone says, “they’ll just have to lower costs, be more efficient, and increase sales,” please show us the proven models for full service restaurateurs to do that and thrive. In my opinion, not enough people are digging deep enough to examine the math, and if the math doesn’t add up, there is no merit to the proposed experiment of significantly increased labor costs.

Nai’s response: “The Alliance for Business Leadership is an organization whose mission is to ensure that economic growth and social responsibility go hand in hand. A lot of our members in the restaurant industry are super skeptical about the ballot initiative and legislation and want to ensure that they can stay open with the increased operating costs. Essentially, we convene business leaders around things like housing, transportation, and taxes and are at the negotiating table as the progressive business voice.

Long story short: We want to be able to do the math for full service restaurants and point people in the direction of some sustainable models that have allowed restaurants to stay open during this transition. We have a lot of HR firms as members who have helped restaurants make similar transitions and are struggling with how to convene people around the information in a way that people can ask questions…We just want to be able to provide a forum for restaurants to discuss this and engage with the payroll and HR specialists who have worked on the back end of similar transitions. We also want to be able to stress the importance of supporting restaurants during this transition to local lawmakers.” 

He also stated that Raise Up MA obtained their data from MassBudget which has not really looked into tipped wage specifically in the restaurant industry and has just aggregated data that’s not really restaurant specific.  It blows my mind that some of the biggest players at the negotiating table didn’t invest more time soliciting input from veteran operators of full-service restaurants.

March 19,2018 in OZY.com: Carol Wood, a director at Homebase, an HR solutions company,… points out that many restaurants are small businesses and labor is a significant portion of their expenses. And when these smaller restaurants try to compete against larger chains that enjoy economies of scale, any move to boost wages will invariably result in the consumer footing the bill.”

This critical factor is not being taken into consideration by many of the key players involved.

Sidenote: I won’t shame him by naming him here, but privately, after the State House rally, I asked a current MA Democratic candidate for governor how many established restaurateurs he spoke with while conducting his research and he said, “A few.” When I asked again, “How many?” he walked away and said he didn’t want to argue with me. As I walked past him on my way out, I left him with the parting comment, “No credibility.”  I sent him the same question via email, and he never responded. This same candidate spoke at the rally preaching the same loose narrative about sexual harassment and “ONE FAIR WAGE” that many misinformed celebrities are preaching. You can’t take a credible stance on these critical issues without doing your homework. And it was apparent from his campaign rhetoric and timid response to me that he barely scratched the surface while researching these complicated issues. There are real people and livelihoods at stake here that too many selfish, egotistical people are manipulating and exploiting for personal and political gain. And with a little bit of digging, it’s easy to determine whose motives are genuine and who is full of shit.

The end result in MA is a triple increase for tipped workers; A) They are guaranteed the full minimum wage, and that amount is increasing every year. B) Operators will raise prices to pay for increased minimum wage and benefits, therefore tips will increase. C) The tipped minimum wage will be increased.

#3- Michigan

Detroit Free Press June 8, 2018:A battle is brewing in Michigan over tipping in restaurants that could fundamentally reshape the industry. The outcome may be decided at the ballot box this November.

In May, the Michigan One Fair Wage coalition submitted more than 373,000 signatures in support of a ballot proposal that would, among other things, incrementally increase the state minimum wage to $12 by 2022 and eliminate the so-called tip credit that allows employers to pay their tipped employees as little as $3.52 an hour. The initiative would bring tipped employees’ hourly pay in line with the state minimum wage by 2024.”

A provision of Fair Labor Standards Act currently requires employers to make up the difference if a tipped employee earns less than the minimum wage, which in Michigan currently stands at $9.25 an hour. But according to the One Fair Wage website, “enforcement is so lax and disorganized that wage theft has reached epidemic levels.”

Several assertions about wage theft claim that it is “rampant,” or reaching “epidemic levels” without substantial,  detailed data supporting the hypothesis. If wage theft is a systemic problem in the restaurant industry (and I believe it is, to a degree), why not drastically improve enforcement rather than upend the the entire industry?

As noted in the MA update above, proponents of ONE FAIR WAGE often neglect to mention that restaurant owners in every state are legally obligated to pay tipped workers the difference between what they make in tips and the full prevailing minimum wage in their state. Efforts to portray tipped workers as struggling to get by on the tipped minimum wage only are misguided, misleading, and manipulative, and undermine the “high road” being preached.

#4- New York

December 17, 2017: Governor Cuomo Unveils 5th Proposal of 2018 State of the State: Examine Eliminating the Minimum Wage Tip Credit to Strengthen Economic Justice in New York State:

“Governor Andrew M. Cuomo today unveiled the fifth proposal of the 2018 State of the State: direct the Commissioner of Labor to schedule public hearings to examine industries and evaluate the possibility of ending minimum wage tip credits in New York State. In certain workplaces, such as car washes and restaurants, where wages and tips are both generally low**, workers’ income can rely entirely upon tips. These tips, meant as a reward for good service, instead serve as a critical wage subsidy that brings workers’ wages just up to the legally mandated minimum wage.”

Fast-forward 6+ months later, from The New Food Economy on June 28, 2018: The New York State Department of Labor on Wednesday [6/27/18] concluded months of public hearings about whether or not to abolish the tip credit and put all workers—including those who receive tips—on the same minimum wage. Here in New York City, that would be $15 an hour by 2020…

Follow the money.

Dropping the tip credit would also line the state’s coffers. Higher wages would result in higher payroll taxes for the state, said Ron Mathews, director of the New York City chapter of the New York State Restaurant Association, an industry group for restaurateurs. He was one of 349 registered speakers at the hearing on Wednesday, which was held at Hunter College before a panel of four Labor Department officials.

“The reality is, New York state stands to gain tremendous tax revenues and talking points for, let’s say, political gain and budgetary benefit,” Mathews testified.”

The public debate over this issue has been contentious, including misguided, uninformed celebrities joining the moral crusade.

The New York State Department of Labor tweeted highlights during their hearings, including this statistic from Andrew Rigie, Executive Director  the NYC Hospitality Alliance:

[**$25/hour is not “generally low” as the 5th Proposal initially stated above.]

Mark Hurley bartends at Pastabilities in Armory Square in Syracuse, NY. He penned an Op Ed on 4/10/18 for Syracuse.com:

“Gov. Andrew Cuomo’s “5th proposal” in his State of the State address would reduce tips, exacerbate income disparities and severely strain already thin operating margins. But it seems, barring a change in course, this city’s service class is about to find out that their stomachs (and savings accounts) don’t agree with the “economic justice” his administration is currently forcing down their throats.

To unpack this a bit, let’s start by introducing a couple terms. The “tipped wage” is a reduced minimum wage paid to service workers earning income from tips. In New York state, it is $7.50 an hour. Employers claim a corresponding “tip credit” ($2.90/hour) on these wages under the condition that an employee must be compensated the full minimum ($10.40/hour) after their tips are counted. Any shortfalls must be reimbursed by the employer, and this obligation is subject to state audit, though it is seldom necessary. (My effective hourly wage is triple the state minimum as a bartender at Pastabilities.) Restaurants use this system to offer reasonably priced fare and, more importantly, adequately compensate non-tipped employees in a notoriously socioeconomically stratified industry.

Having established this, enter the Restaurant Opportunities Center United (ROC United), a national labor organization spearheading the campaign to eliminate the tipped wage in New York state. Abolishing this system, they claim, has the potential to halve the rate at which service professionals experience sexual harassment. Their advocacy and research on this subject has become a cause celebre backed by the Time’s Up movement, repeated breathlessly in the media  and referenced in Cuomo’s policy proposal. There’s only one catch: Their conclusions are bunk. ROC United’s claim — that sexual harassment rates are doubled in states using a tiered wage system — is founded on a cynical manipulation of their dataset that fails to accurately measure the customer-server harassment it purports to. It is not reproduced using more forthright statistical methods and it is not observed in federal data.

Local service professionals should not be content to sit by as the administration imperiously dictates our compensation rates. You can push back: Workers successfully overturned a similar referendum in Maine after expressing anger over reduced tips in addition to the issues outlined above.”

On 4/25/18, Juliet Masters-The Edge Harlem Cafe, Melba Wilson-Melba’s Restaurant, and Crizette Woods-Sylvia’s Restaurant, all female restaurant owners in New York, authored an OP-ED in Crain’s New York Business: Wage hike is tipping point for restaurants- Jacking up base pay for servers would sink us.” The piece was co-signed by 17 additional female restaurateurs in New York: 

“In February many of us were featured in a Crain’s cover story as female entrepreneurs who were instrumental in Harlem’s restaurant renaissance. The story provided concrete examples of the success of the area’s minority- and women-owned businesses. Unfortunately, that status is now being threatened.

Hollywood celebrities are pressuring Gov. Andrew Cuomo to eliminate the tip credit that restaurants can apply against the regular minimum wage when they pay tipped workers. As Cuomo holds public hearings on this across the state, he ought to value our voices as well. The credit allows us to manage costs when our servers and bartenders earn more than the full minimum wage in wages and tips combined—as they often do by large margins. If that compensation falls short, we have to make up the difference so no one is earning a sub–minimum wage.

Running a restaurant in New York City is beyond expensive. We deplete our savings and mortgage our homes in hopes of establishing model businesses in our community. In Harlem, the cost keeps going up. The tip credit has helped us open and sustain our restaurants.

We didn’t start our businesses just to make a profit but also to offer great hospitality and food that nourishes our neighbors’ souls. We want to set a positive example for other women as well as Harlem’s youth so they may see their future selves in every meal served. Part of our mission is to create job opportunities for our residents. They are young and old, college-educated and GED recipients, immigrants and the formerly incarcerated—all of whom deserve opportunity in their backyard of Harlem.

Many of us capitalized on the lower commercial rents in Harlem to find a storefront and bootstrap the rest until we were able to get the cooking gas turned on. Unsurprisingly, because of our success and other forces, rents have risen, making it more challenging for others from the neighborhood to do the same. Once you do get your doors open, you can embrace the competition and the day-to-day grind of running a small business. However, the red tape, laws and regulations make it much more expensive and complicated to survive, let alone thrive.

Putting aside those challenges, we’re proud that our tipped workers earned a living wage before the governor increased their base wage 100% over the past three years. During that same period, he reduced our tip credit three times. If Cuomo eliminates our tip credit completely, we would need to reevaluate the existence of our businesses. We are already reducing employee hours and positions to keep our doors open.

Some people claim the practice of tipping results in harassment of workers by customers and employers. We don’t agree that eliminating the tip credit will effectively address such unacceptable behavior. We do, however, believe that losing the credit will put our restaurants and the jobs of our fellow women and minorities in jeopardy.

Many restaurant and bar owners would consider banning tipping and raising menu prices in an attempt to stay afloat, but that would result in some servers earning less than they do now.

Rather than take our employees’ gratuities, the governor should accept a tip from this group of successful minority and female business owners and save the tip credit.”

August 3/18 News10NBC-NYS Exposed: State DOL reviews wage increase proposal for tipped workers:

“I think about it every day, I really do,” says John Urlaub, owner of Rohrbach Brewing Company

At Rohrbach Brewing Company in Gates, waitresses and bartenders rely on tips. Now, there are wide-spread concerns about a potential change that could impact those earnings.

“I think financially it will hurt them, not only in the percentage tips that they get, but if you aren’t filling the seats, you’re not serving food, you’re not getting a tip on that,” says Urlaub. 

The plan would raise the minimum wage for tipped workers from $7.50 to $10.40.

However, many believe that increase will decrease the amount that workers make in tips. It would also raise the burden on business owners by forcing them to pay the higher wages.        

“It’s not like we don’t have any information about whether this is the right move or not,” adds Urlaub. “In the state of Maine, they tried it and they reversed it and not because the owners were screaming, but the staff was saying, ‘this did not work out the way we wanted.'”

July 24, 2018 ROC update via e-news: “Currently, tipped workers have to count their hard-earned tips toward simply getting paid a minimum wage. This amounts to an unfair profit subsidy for employers, and less money in workers’ pockets.” 

#5- ROC United. 

Let’s start where bartender, Mark Hurley (above) left off.

According to the New York Post on June 27, 2018, NYC restaurateur, Danny Meyer “was among 21 eatery owners who signed an advocacy group’s letter to Gov. Andrew Cuomo calling for the end of the tip credit wage paid to wait staffs across the state… Meyer was not happy to learn that his name was included on the letter. He quickly asked to have his name and restaurants removed from the missive.” 

Additional excerpts from the New York Post piece:

“The group, the Restaurant Opportunities Center, or ROC, is seeking to eliminate the lower-than-minimum wage now paid to waiters and waitresses in New York.”

“Meyer’s name on the letter raised eyebrows — and tempers — of other eatery owners in the city because it would have marked the first time the 60-year-old businessman, whose stable of restaurants includes the Union Square Cafe, Gramercy Tavern and Shake Shack, publicly advocated for forcing the change.”

“The hospitality guru does not think that his peers in the restaurant industry should be forced to match the wages he pays his staffs.”

“Meyer believes restaurateurs should implement their own solutions to the problem, sources familiar with his thinking said.” [I would still like to hear this reinforced from Danny Meyer himself, and have reached out to him for comment. Possibly link to my tweet.]

ROC President Saru Jayaraman, who has tapped Sarah Jessica Parker in the group’s fight to eliminate the tip credit, owned up to the Meyer mistake.

“We accidentally included [Meyer] in the letter, but look forward to continuing our shared fight for a better industry,” she said.

In Part 1 of this series, I included questions and answers from an email exchange I had with ROC United leadership. ROC co-founder, Fekkak Mamdouh responded on behalf of his team. Here are some open-ended items that he still has not responded to:

Question #1 What is the current ROC United position on the social contract, the custom of tipping in America?

Fekkak (partial) response: ROC supports One Fair Wage, which means better wages and better tips.[1] The seven states that have One Fair Wage – which means that restaurant owners pay their workers the full minimum wage and that tips are on top of the wage – have higher restaurant sales per capita, higher job growth among servers and other restaurant workers, and the same or higher rates of tipping.[2],[3],[4] All seven states have the same or higher tipping averages as the 43 states with lower wages for tipped workers.[5] According to PayScale, servers in San Francisco, California, with the highest wage in the country at $14 per hour, earn median hourly tips of $11.90, compared to $9.50 in NYC, and $8.50 in Washington, D.C.[6] That’s because customers do not tip based on how much the server earns in wages – most customers have no idea how much the server earns in wages.

Fekkak full response in Part 1.

Patrick Maguire response:

Fekkak, thank you for responding to my questions in a timely manner. I asked question #1 because it appears that the ROC position on tipping has evolved over the years, from denouncing the notion of the practice entirely, to now embracing tipping in addition to servers receiving full minimum wage. Is that because of the evidence that several ‘no tipping’ or ‘hospitality included’ (Danny Meyer-USHG) experiments are failing in America? In addition, you didn’t answer my original question:

Given the above, what is the current ROC United position on the social contract, the custom of tipping in America?

Fekkak, Saru, and ROC: No additional response as of  8/6/18.

Question #4- If eliminating the tip credit and implementing ONE FAIR WAGE is in the best interest of all servers, workers, and restaurant owners, why did LD 673 pass reinstating the tip credit after careful scrutiny by the Labor, Commerce, Research and Economic Development Committee (11-2 favorable vote) and a bi-partisan legislative vote for reinstatement in Maine? Shouldn’t the reversal in Maine send a loud and clear message to Massachusetts, New York, and all other states considering elimination of the tip credit and tipped minimum wage to slow down and thoroughly consider the implications before passing legislation or a ballot initiative?

Fekkak Mamdouh:  The people of Maine passed the One Fair Wage ballot measure in November 2016. More people voted in favor of raising the wages of both tipped and non tipped workers than either Presidential Candidate.[10] After it passed – and before it was implemented – the National Restaurant Association (NRA) spent significant funds lobbying to overturn the ballot measure.[11] The NRA is a highly funded trade lobby representing the Fortune 500 corporate restaurant chains. It has lobbied heavily in every state, including Maine, to keep wages for tipped workers as low as $2.13 at the federal level and $3 in Maine. Corporate interests should not overrule the basic needs of working people to survive.

Wendyll Caisse (RWA) response to Fekkak: 

As an active member in the Restaurant Workers of Maine, which was simply a Facebook Page started by a server by the name of Jason Buckwalter from Bangor; I can attest that we did NOT receive even a phone call from the NRA during our grassroots effort of 5,000 servers – and absolutely NO funding – we didn’t even have a bank account! The tipped wage information cited here for Maine is incorrect. After the referendum passed by a slim margin in November, many voters were not even aware of what they had voted for, as the elimination of the tip credit was 1 part of a 3-part question. The start of the wage escalation was implemented on January 1, 2017, the tipped minimum went from $3.75 per hour to $5.00 and the minimum wage went from $7.75 per hour to $9.00. The people most intimately affected by the loss of the tip credit were the ones asking for the reinstatement.

Fekkak, Saru, and ROC: No additional response as of 8/6/18.

Question #5- If a restaurant previously had a tipped minimum wage of $3.75 (current in MA), and the tipped minimum wage went up to $15/hour, even gradually over 5-6 years, what would ROC United’s advice be to owners of FULL SERVICE restaurants (with servers, no automation) to keep Prime Cost under 60%? How much would an owner need to raise their prices to achieve 60% prime? Do you acknowledge the risk of your experiment and why so many restaurant owners are fearful of it?

Question #6- With the elimination of the tipped minimum wage and ROC United’s Fight for $15, what is the ‘new’ labor cost percentage goal if servers are making $15/hour?

Fekkak Mamdouh (Responses to #5 + #6): Restaurant owners in seven states – Alaska, Minnesota, Montana, Oregon, Washington, Nevada, and California – keep their prime costs well under 60%, and are thriving. (Partial response. The complete response can be found in Part 1.)

Patrick Maguire response: Fekkak, I would love to see the data from the full service restaurants in the 7 ‘One Fair Wage’ states operating at prime costs “well under 60%” that are “thriving.” Has this data been presented to the legislature, the Labor Committee and all parties currently negotiating in Massachusetts?

Fekkak, Saru, and ROC: No additional response as of 8/6/18.

Question #7- Saru, Fekkak, Sekou, and ROC United leadership- I believe that commingling the issues of sexual harassment and server compensation (via tipping and tipped minimum wage) is a strategy being employed by ROC United (with cherry picked data) to mislead and exploit the very people that you are claiming to be advocating for. And many of the Hollywood folks jumping on the morality bandwagon are enjoying the optics of the crusade, but are misinformed and unaware of the crucial details (and math) of how a cause they claim to be champions of could actually harm many individuals and small businesses. There should be more time, effort, and energy focusing on facts, education, and compromise to benefit servers and all workers rather than all of the divisive rhetoric against ‘rival’ lobbying groups. I welcome your response to my statements and anything cited above following question #6.

Fekkak initial response: “There are now multiple sources of research and investigative journalism that corroborate that a mostly female workforce of tipped workers (two-thirds of tipped workers nationally are women) having to rely entirely on tips for their income subjects them to sexual harassment from customers, co-workers and managers. We surveyed 688 workers nationally on the issue; nearly 90% said they experienced sexual harassment as a result of having to tolerate inappropriate customer behavior to feed their families in tips.[16]” (This is a partial response. Full response can be found in Part 1.)

Patrick Maguire response: Fekkak, you painstakingly provided 18 footnotes for several items, but did not provide any to support your opening comments, “There are now multiple sources of research and investigative journalism…” And please provide a copy of the survey and the method of choosing the 688 workers that you mentioned above.

Wendyll Caisse (RWA) response to Fekkak: 

The perpetrator of harassment bares the sole responsibility of their deviant behavior because to point blame on the compensation system removes the blame from the accused. Sexual harassment is a cultural problem that we are finally beginning to address, and if solving this social issue was as easy as a wage discussion, on street harassment wouldn’t be the most prominent situation that harassment is experienced in. RWA in no way acknowledges any ‘reports’ executed by ROC because of their flawed methodology, such as using IP addresses for the One Wage states vs. doing focus groups and interviews. Additionally, we at RWA hold their interviewer training and interviewer ‘drawing’ techniques as highly suspect. (This is a partial response. Full response in Part 1.)

On June 1, 2018, MinimumWage.comEEOC Data Debunks Claimed Link Between Tip Credits And Sexual Harassment:

“Perhaps the most-popular argument for eliminating the tip credit is the claim that states without one have half the rate of restaurant sexual harassment as those states that do. Earlier this year, the Employment Policies Institute released a report-length examination of the problems with this claim, which was based on a deeply-flawed survey conducted by the Restaurant Opportunities Center (ROC).

Based on a review of ROC’s methodology and Equal Employment Opportunity Commission data collected during the time period studied by ROC, EPI concluded that “claims about a tip credit and its link to sexual harassment are…baseless.” New data obtained from the Commission via a public records request, which cover all federal- and state-level sexual harassment charges from the restaurant industry filed between 2007 and 2017–from customers, coworkers, and management–cast further doubt on ROC’s claim.

Contrary to ROC’s claim, the data show that the seven states without a tip credit (plus Hawaii, which has a very small tip credit) all have a higher percentage of restaurant sexual harassment charges than does New York–a state where ROC is trying to eliminate the tip credit.

There are few if any strong arguments for eliminating the tip credit. But the data make clear the worst argument for doing so is the claim that it’s in any way linked to sexual harassment.”

Fekkak, Saru, and ROC leadership, I welcome your response.

Question #8- Has the pledge to furnish proof of the accusation that RWA is being backed by the National Restaurant Association been followed up on by Saru or anyone at ROC United?

Fekkak Mamdouh:  Restaurant owners who are part of the National Restaurant Association funded the launch of Restaurant Workers of Maine, which then launched Restaurant Workers of America. The RWA has admitted it receives no money from restaurant workers, only restaurant owners.[17] The NRA funds the RWA to travel around the country to oppose higher wages for restaurant workers.[18]  (Fekkak Mamdough footnotes are included at the end of Part 1.)

Wendyll Caisse (RWA) response to Fekkak:

While some of the above answers are disingenuous, this response is a patent lie. The Restaurant Workers of Maine was simply a Facebook group of 5,000+ servers, started by a server that received ZERO funds and never had a bank account. The RWA is not funded by, nor connected to, the NRA. As the Treasurer of this new 501c4, I was happy to see numerous $1 and $5 membership fees coming in from tipped servers across the country; there have been no deposits from the NRA. Again, ROC has made another false statement; we HAVE received funds from restaurant workers. Through the generosity of our restaurant community, our board members have been able to enjoy low travel expenses due to people offering rides, couches, and meeting accommodations at no cost to us.

Fekkak, Saru, and ROC: No additional response as of  8/6/18.

In addition to the evasive, incomplete responses from Part 1, there are some additional,  important items to note about Fekkak Mamdouh, Saru Jayaraman, and ROC United.

To be clear, ROC United, the organization preaching that restaurateurs need take the “High Road” and pay their tipped employees $15/hr, ‘operates’ 1 restaurant in Detroit (COLORS) from 11am to 3pm for lunch only. And the restaurant is partially funded by grants. Real restaurants with real balance sheets, struggling to survive, don’t have the luxury of grants and artificial assets. That’s right, they’re open for 4 lunch shifts a week, period!

From the COLORS Detroit website:

Mission: COLORS is the Social Enterprise of the ROCMIchigan.org (ROC-MI) a division of Restaurant Opportunities Centers United (ROC United) based out of New York. Our goal is to set the example through professional training, strategic execution, and the operational action of running a successful restaurant and showing how it can co-exist alongside of caring for our #1 Customer… beside the patrons that we service… OUR EMPLOYEES!

Despite having announced that they will be opening restaurants in NYC, Oakland, CA, Washington, D.C., and New Orleans, the only ‘restaurant’ that ROC currently ‘operates’ is open 4 days/week for lunch, and funded by grants.

To date, despite several requests from multiple sources, I have never seen a comprehensive financial model from ROC demonstrating how real, full service restaurants are supposed to ‘thrive’ while paying their tipped workers $15/hr. 

Wendyll Caisse (RWA):

“The restaurant industry normally has a 30% labor cost (with a tip credit model) – retail has 11%. To put forth ROC’s version of this measure that not only raises the minimum wage but eliminates the tip credit is an experiment that has never been done before. Full service restaurants will have a 400% cost increase in their server pay line item. To most operators, this is simply not feasible without making drastic labor cuts or automating. ROC has not done the math. We can make changes as owners, but it will be at the detriment of our staff. Changing from a full service model to counter service for example, would allow an operator to cut their FOH staff by 75%. Additionally, some urban, high end operators may succeed with a 40% menu price increase – but there is no financial evidence that this model is sustainable for independent, mid-priced restaurants. RWA has put forth an escalation model, that doesn’t even speak to PEOD (Price Elasticity of Demand) in menu price increases, it is beyond irresponsible that a national, well-funded organization like ROC, with $9.8 million in total revenue in 2016, can’t give a financial model of a 400% increase in the tipped wage in Massachusetts from $3.75 to $15 that they are promoting.”

Fekkak, Saru, and ROC leadership: No additional response to Wendyll’s statement as of  8/7/18.

From the ROC website: One of the tenets of the ROC United model: (2) Engaging employers through our “high road” employer association RAISE, which provides: training, technical assistance, and a peer network of like-minded employers following the high road to profitability, which includes higher wages and working conditions for those employed at their restaurants; leadership development and civic engagement opportunities; research and communications work that documents the benefits for all three stakeholders of taking the high road and more.

Question and comment for Fekkak, Saru, and ROC Leadership: Does the statement above imply that struggling, REAL restaurant owners who are not voluntarily paying their tipped staff $15/hr are inferior or taking the “low road?” Instead of morality plays, money grabs, and divisive rhetoric, I’d like to see real numbers, and thoughtful, fair, creative solutions that simultaneously take into consideration workers, owners, and customers alike. And stop skewing the data by combining earning statistics of minority, female servers at national chains in rural America with workers at independent, full service restaurants in urban locations for the convenience of your unfounded, guilt-ridden narrative. And show us the in-depth financial modeling from multiple ‘thriving,’ full service restaurants in every “ONE FAIR WAGE” state.

Fekkak, Saru, and ROC Leadership: No2DC77 in the graphic above** claims that in 2014 and 2015 you received 2 grants from the Novo Foundation totaling $1.1 million for “Project support district of Columbia campaign to end tipped minimum wage.”  Will you please confirm receipt of those funds?

Fekkak, Saru, and ROC Leadership: In your monthly e-news you state that “Nothing supports our fight for better wages and better tips more than your monthly contributions. It’s that consistent support that we need to focus on what matters: lifting the workers, and especially women of color who turn their power into an electoral muscle.” That quote is just above your requests for donations. Is it your intent to unionize restaurant workers, increase their wages and extract union dues from their pay to sustain your organization longer term?

Kekkak, Saru, and ROC Leadership: According to Ballotpedia, the Michigan One Fair Wage campaign has raised and spent more than $1 million, with most of the donations coming from the ROC and its affiliated organizations. Please confirm.

Also, will you please provide a breakdown of how much money ROC has spent lobbying for ONE FAIR WAGE ($15/hr.) and against the tipped credit in every state?

As I have previously stated, despite their initial noble, humble mission, ROC’s evolution has been very disappointing. I’ll take a deeper dive into their troubled history in a future post.  Their current strategy of dodging facts, misleading information, questionable studies, and commingling sexual harassment and server compensation to exploit the very people that they claim to be advocating for, is disingenuous. There should be more time, effort, and energy focusing on facts, education, and compromise with lawmakers to benefit servers and all workers and restaurant owners, rather than divisive rhetoric against ‘rival’ lobbying groups and eliciting platitudes from uninformed Hollywood actors. And let’s be clear, the ROC United cottage industry is a lucrative endeavor.

The financials below were obtained from public IRS Form 990 for Nonprofit Tax Code 501(c)(3):

As reported in a Capital Research Center piece by Julia Tavlas in August of 2013:

ROC steadfastly denies that it is a union even though, as the Village Voice once noted, “it often employs the tactics of bargaining, protesting, and picketing.”  ROC-United claims 501(c)(3) public charity tax status under the GuideStar.org classification of “category R20 (Civil Rights, Advocacy for Specific Groups).” And there’s a reason why it is classified as such and not as a union. As the website ROCexposed.com (currently inactive) explains:

While labor union activities are highly regulated under the National Labor Relations Act (NLRA) and other labor laws, the activities of so-called “worker centers” remain largely unregulated. By operating as a worker center, ROC can claim 501(c)(3) charitable organization status, which allows ROC to pay no taxes and to raise tax deductible contributions from foundations. But more importantly, this also allows ROC to flagrantly skirt federal labor laws and union disclosure requirements.

ROC United Financials 2016 (2017 unavailable)

Total Revenue: $9,871,538

Salaries, other compensation, employee benefits: $2,788,285

Total assets beginning of year: $2,589,350

Total assets end of year: $9,129,736

Total liabilities beginning of year: $196,982

Total liabilities end of year: $1,802,747

Net assets or fund balances beginning of year: $2,392,368

Net assets or fund balances end of year: $7,326,989

Fekkak Mamdouh compensation: 2016 = $84, 442  2015 = $103,295

Sary Jayaraman compensation: 2016 = $89,625  2015 = $102,691

2016 Travel: $276,312

2016 Schedule C Part II-A:

#1c-Total lobbying expenditures to influence public opinion: $319,977

Additional income for Saru and Fekkak derived from ROC affiliates, Diners United, ROC Action, or the UC Berkeley Food Lab Research Center could not be located.

Servers, restaurant industry workers, and owners interested in supporting industry brothers and sisters in the fight to preserve the tip credit should follow and support the work being done by Restaurant Workers of America-RWA, and share their website, Facebook page, Twitter, and Instagram platforms with your restaurant colleagues and everyone in your network willing to support you.

Thanks to everyone who provided information for this post. Stay tuned for Part 3. Feel free to join the conversation in the comments below, or email me at patrick@servernotservant.com with tips, information, and/or recommendations for future posts.

If you are interested in supporting the Server Not Servant blog and bringing the book project to fruition, please see the blue box on the right hand side of this blog post to make a donation. Thank you for your consideration.

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Bin Ends Wine Celebrating Anniversaries in Braintree and Needham, MA

By: Patrick Maguire

Book Chapter: Customer Hall of Fame

Posted: 7/9/2018

**Sponsored Content**

On rare occasions, I post content on this blog to promote charitable events or for clients of my PR, Social Media & Hospitality Consulting business for people and businesses I’m proud to work with. Please email patrick@servernotservant for future consideration. Thank you.

I’m honored to be working with John Hafferty and Cara Cicconi Hafferty of Bin Ends Wine and to share the good news about the anniversaries of their shops in Braintree and Needham, MA. Please keep John, Cara, and Bin Ends in mind if you need wine/liquor store perspective or consultation for future features on wine, beer, spirits, entrepreneurship, small biz, Mom and Pop shops, or anything else they can help with. And please consider sharing this post to congratulate John, Cara, and their team.

Announcement-Bin Ends Summer 2018

Bin Ends is proud to announce the summer celebration of the 10-year anniversary of their Braintree store, and the 5-year anniversary of their sister store in Needham. The concurrent anniversaries are being celebrated with the launch of a new website for expedited online purchases, a community dinner, and special events in both stores.

Bin Ends is a local, independent retailer of fine wine, craft beer, and artisan spirits founded in 2008. Managing Partner, John Hafferty, with nearly 30 years of experience in the fine wine trade, has dedicated his career to the idea that a bottle shared can quickly turn strangers into lifelong friends. Before opening Bin Ends, John worked for nearly a decade as fine wine portfolio manager and buyer for M.S. Walker, one of New England’s largest and most respected fine wine wholesalers.

John tastes every wine sold at Bin Ends and works closely with vendors to provide “Great Wines at Serious Savings” for savvy wine buyers and novices alike. Bin Ends has a passionate and knowledgeable staff eager to help you find wines that you will love. They offer daily features via a unique e-commerce platform and popular in-store tasting events, Fine Wine Flea Markets, and Fine Wine Estate Sales. They also host popular in-store food and wine pairing seminars and wine dinners that are held in restaurants and unique settings throughout greater Boston.

Loyal, repeat customers travel from all over New England to explore their unique selections, engage the friendly staff, and take advantage of their highly competitive pricing. Once again, Bin Ends is proud to be named “#1 Liquor Store” for 2018 by Wicked Local for both their Needham and Braintree locations.

Mission Statement-Bin Ends

At Bin Ends, it is our mission to create the best possible retail experience by providing superior customer service and offering a unique selection of wines, beers, and spirits at “Serious Savings.” We also use our business as a vehicle to champion small producers around the globe. By supporting boutique wineries, artisanal distilleries, and craft breweries, we are actively working to preserve the culture and tradition of family and locally-owned enterprises.

Upcoming events:

1. Bin Ends Fine Wine Estate Sale: Saturday, July 14th from 2-8pm in Needham.

2. Vive La France Wine Dinner: July 22nd at 5:30pm at Just Right Farm, Plympton, MA. Tickets $150 includes tax and gratuity. Buy online.

3. Bin Ends Fine Wine Flea Market: Sunday, July 29th 1-5pm in Braintree.

Bin Ends Locations:

236 Wood Road                   65 Crawford Street

Braintree, MA                      Needham, MA

02184                                     02494

Social Media:

Facebook

Instagram: @binendswine

Twitter: @binendswine

Website 

Email: info@binendswine.com

Sign-up for Bin Ends Newsletter

Thank you very much for sharing in the celebration of anniversaries at Bin Ends. Congratulations and cheers to John, Cara, and the team at Bin Ends.

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Saru Jayaraman, Fekkak Mamdouh, ROC United Leadership & Members: Is ONE FAIR WAGE really FAIR for All? Tip Credit & Tipped Minimum Wage-Part 1

By: Patrick Maguire

Book Chapter: Human-to-Human Service

Posted: 5/3/2018

It’s complicated.

On Sunday, April 22, 2018, I sent the email below to ROC (Restaurant Opportunities Center) United leadership.

The next day, on Monday, April 23, 2018, I received an email confirming receipt from Sekou Siby, executive director ROC United, indicating that someone on the ROC team would respond. People copied on Mr. Siby’s email included:

Saru Jayaraman, co-founder ROC United (saru@rocunited.org)

Fekkak Mamdouh, co-founder ROC United (Mamdouh@rocunited.org),

Teofilo Reyes, Research Director ROC United (teo@rocunited.org)

Jennifer Prescott, postion w/ROC United not listed on website (jennifer.p@rocunited.org)

My email with responses received from Fekkak Mamdouh  from ROC United on 4/29/18 are noted after each question:

T0:  Saru Jayaraman, Fekkak Mamdouh, Sekou Siby

CC: Yamila Ruiz, Legal Organizer ROC United (yamila@rocunited.org)

Subject: Opportunity to Respond to Patrick Maguire for Server Not Servant blog post on Tipped Minimum Wage

Hello, Saru, Fekkak, and Sekou-

My name is Patrick Maguire. I write a blog titled, I’m Your Server Not Your Servant advocating for service industry workers. I’m working on a blog post about the impact of gradually increasing, and ultimately eliminating, the tipped minimum wage as you are proposing, “Through the ONE FAIR WAGE campaign, ROC United is fighting nationally to eliminate the two-tiered wage system by raising the separate, lower minimum wage for those who work for tips in the restaurant industry to match the regular minimum wage, so that no one has to experience the financial insecurity, discrimination, and sexual harassment that comes with being forced to live off tips.”

I would appreciate it if ROC United leadership would consider reading and responding to the following items for inclusion in my blog post scheduled for release the week of May 1:

I live in Massachusetts, and the pending MA minimum wage legislation (House 2365 & Senate 1004) is what initially sparked my interest in this topic. Many restaurateurs and servers are understandably concerned about the impact of the legislation on their livelihoods. In addition to reading everything I can, I’m gathering information and perspective from several sources to present a thorough, balanced, and fair assessment regarding the proposed MA legislation and related issues. Two of the major issues that I will be addressing are the scenarios where servers in full service restaurants would take a pay cut, and the threat to the survival of independent, full service restaurants.

Theoretically, philosophically, and morally there is rationale to support why the idea of eliminating tipping makes sense. However, the practical implications of imposing an experimental ‘solution’ on a culture unwilling to embrace the change will adversely impact the earnings of many servers, and simultaneously threaten the survival of independent, ‘Mom and Pop’ restaurants. For those reasons, I am going to propose in my blog post that tipped minimum wages remain, and are set as a percentage of rising full minimum wage amounts. Further, I believe that the simplistic sounding, ONE FAIR WAGE ‘solution’ to the ‘living wage’ problem is far more complicated than ROC United and others make it sound. One size does not fit all. Legislation that might increase the pay for servers averaging $9/hr at a rural, national chain in the Midwest could simultaneously and significantly reduce the earnings of servers working at independent, full service restaurants in American cities where servers are earning a lot more than even ‘full’ minimum wage. I believe that we need to encourage local legislators to be more creative rather than imposing rigid, cookie cutter ‘solutions’ that just don’t work. I’d like to see ROC, NRA, RWA, RAISE Up (and other advocacy groups) consider a framework/compromise that is in the best interest of the diverse group of local workers, restaurants, and the customers they serve. We need more tiered solutions based on revenue, # of stores, # of employees, benefits provided, type of service, geography, median income, etc. I will encourage that creative collaboration in my blog post.

Considerations for Question #1:

Leslie Stahl interview with Sara Jayaraman on 60 Minutes Overtime on 4/15/18:

Leslie Stahl: “Jayaraman helped NY restaurateur, Danny Meyer come up with his policy of eliminating tipping entirely, building the cost of service into the bill and into every employee’s pay, but she says the real answer is eliminating the sub-minimum [tipped minimum] entirely.”

Saru Jayaraman: “The solution is so concrete and tangible. Pay these women an actual wage just like kitchen staff, just like every other industry. Let tips be on top of that as they were always intended to be. And let them actually not have to put up with anything and everything from a customer.”

[End of interview excerpts.]

Saru, I realize that your position on tipping may still be evolving, and that some of your quotes have been taken out of context. I also realize that you are most likely well aware of the initial failures of the Danny Meyer “Tipping Included” experiment. On 10/19/17, I posted the following message in my Server Not Servant Facebook Group with this piece from Grub Street attached:

On October 14, 2015 I posted in this group that “This (Danny Meyer’s implementation of a no-tipping business model) will significantly advance a movement that has been slowly gaining momentum the last few years.” My supposition was wrong. Two years after the initial announcement, Danny Meyer’s ‘Hospitality Included’ (no tipping) experiment is in peril. Excellent update from Keenan Steiner for Grub Street. I strongly recommend reading the entire piece, but here are a few excerpts: #1-“After Hospitality Included was introduced at Maialino in 2016, the entire front-of-house staff turned over twice with the exception of a few people. At North End Grill, a significant group of workers from both the front-of-house and back-of-house quit. At Gramercy Tavern, though many veteran servers have stayed, a good number recently decided that they couldn’t bear the pay cut anymore and that the situation was not going to improve.” #2-“We were very ambitious with our timeline,” Moran (Union Square Hospitality Group’s Chief Culture Officer) explains, “and we learned very quickly that this is much more challenging than we had anticipated.” And yes, it is noteworthy that Keenan (reporter) is a former USHG server.

3/13/14 Cal Alumni Association: In fact, she [Saru] says the bickering over raising the minimum wage is almost beside the point. “Ultimately, this system of tipping needs to go,” she says. “I can see a day when restaurant workers are paid like salaried professionals, make a livable wage for the region where they reside, and tips are a luxury on top of that. It’s our moment to set things in motion to make that happen in the years to come.”

#1- Given the above, what is the current ROC United position on the social contract, the custom of tipping in America?

Fekkak Mamdouh:  ROC supports One Fair Wage, which means better wages and better tips.[1] The seven states that have One Fair Wage – which means that restaurant owners pay their workers the full minimum wage and that tips are on top of the wage – have higher restaurant sales per capita, higher job growth among servers and other restaurant workers, and the same or higher rates of tipping.[2],[3],[4] All seven states have the same or higher tipping averages as the 43 states with lower wages for tipped workers.[5] According to PayScale, servers in San Francisco, California, with the highest wage in the country at $14 per hour, earn median hourly tips of $11.90, compared to $9.50 in NYC, and $8.50 in Washington, D.C.[6] That’s because customers do not tip based on how much the server earns in wages – most customers have no idea how much the server earns in wages.

ROC has been the leading voice defending workers’ tips as their own. In fall of 2017, the National Restaurant Association (NRA), which represents the Fortune 500 restaurant chains, pushed President Trump to propose a rule that would make tips the property of owners rather than workers.[7] The NRA has been lobbying to keep its workers tips for managers and owners for many decades. ROC led the fight against the NRA and this troubling rule, mobilizing 400,000 workers, employers and consumers to protect workers’ tips as their own. ROC won the battle against the NRA’s proposal to keep their workers’ tips, achieving a bipartisan Congressional bill in April that declares that tips should remain the property of workers now and forever.[8]

Patrick Maguire response: Fekkak, thank you for responding to my questions in a timely manner. I asked question #1 because it appears that the ROC position on tipping has evolved over the years, from denouncing the notion of the practice entirely, to now embracing tipping in addition to servers receiving full minimum wage. Is that because of the evidence that several ‘no tipping’ or ‘hospitality included’ (Danny Meyer-USHG) experiments are failing in America? In addition, you didn’t answer my original question:

Given the above, what is the current ROC United position on the social contract, the custom of tipping in America?

Wendyll Caisse-Treasurer and co-founder (RWA) Restaurant Workers of America response to Fekkak Mamdough #1:

RWA listens to real servers and bartenders across the country and we are looking at real people and businesses instead of misleading statistics. We assist independent restaurant operators with wage escalation proformas, so that they can see what’s coming with Saru’s experiments. Servers average over $30 an hour and bartenders $40 an hour. Our mission is to save lucrative tipped jobs that do not require a college degree, and preserve the full service dining experience as an option for all, not just the Hollywood elite or those with similar bank accounts.

On ROC’s website they list 200 restaurant member,s not 500. The 21,000 restaurant workers in NY, in addition to the 5000 in Maine, and not even counting our friends in Minneapolis, Seattle, D.C. and beyond – we outnumber ROC to a staggering degree. We talk about the math and we talk about the potential job losses and our voices are not paid to testify, unlike ROC. Saru and ROC supports unions, and it’s a symbiotic relationship as outlined in this 5/25/17 piece by Capital Research Center. From the piece:

Summary: “It began on the fringes of union activism. In just a few years, the campaign for a $15 an hour federal minimum wage—armed with the slogan “Fight for $15!”—has gone mainstream. And should this union-driven movement succeed, the result could be a lot of frustrated job seekers and shuttered businesses.”

Saru wants to eliminate tips: NYT Opinion 10/15/2015-Why Tipping Is Wrong by Saru Jayaraman

We at RWA believe that tips have normally been the property of the interfacing FOH staff–RWA does not have a board position on this rule. However, we would like to see some definitions of positions put into this language, as a ‘Shift Leader’ has not been defined by the DOL, and this is a pivotal position in transition to management, but should be a tipped position.

We believe the tipped model works, and our owners and tipped employees are allies in this position. We take offense at ROC saying we’re slaves that are helpless and abused. We are a STRONG restaurant family that will fight for keeping tips as part of the equation to ensure that our workers continue to make well above minimum wage and we save the experience of dining. Our customers enjoy tipping and it benefits servers.

#2- Saru, I don’t recall reading anywhere that you have ever worked as a tipped server. Have you?

Fekkak Mamdouh:  Saru has not, but I have worked as a tipped worker – delivery person, busser, and server – for more than 20 years. I have worked as a server in particular for over 17 of those 20 years. All of my fellow server colleagues from Windows on the World and the restaurants I’ve worked in support One Fair Wage. I am the co-founder of ROC United and co-lead the One Fair Wage campaign.

Wendyll Caisse (RWA) response to Fekkak:

Saru Jayaraman is a Labor Attorney with an agenda to unionize those who are not asking for it.

——————————————————————————————————

Considerations for #3:

From the One Fair Wage link via (ROC) United website, “It’s time to do more than raise the tipped minimum wage. Through our ONE FAIR WAGE campaign, we will be advancing campaigns across the country to pass legislation in cities and states that will require the restaurant industry to pay all its employees at least the regular minimum wage.”

One Fair Wage allows those who work in the industry to receive a fair base wage & their tips on top. We must make clear that One Fair Wage allows those who work in the industry to increase their overall income because tipping will still be allowed.” -(ROC) United website.

According to Andrew Farnitano of Raise Up MA, “ROC United has been a great partner of Raise Up MA on our campaign to raise the sub-minimum wage for tipped workers. We’ve relied on their expertise, research, and worker organizing throughout our campaign.” If the MA legislature does not address the tipped minimum wage issue to the satisfaction of Raise Up MA, they (RU MA) will move forward with a ballot initiative that incrementally raises the tipped minimum wage as follows:

1/1/19 $5.05

1/1/20 $6.35

1/1/21 $7.64

1/1/22 $9.00

1/1/23 Tied to CPI

Those numbers are significantly less than the proposed MA Legislation that incrementally raises the tipped minimum wage in MA from $6.75 on 1/1/19 to $15.75 on 1/1/25.

#3- What is the official ROC United position on the pending MA Legislation? Do you support the Legislation as proposed, or the more moderate Raise Up MA ballot numbers?

Fekkak Mamdouh:  ROC supports One Fair Wage – the full minimum wage for tipped workers, with tips on top. As mentioned above, the seven states that have One Fair Wage have higher restaurant sales per capita, higher job growth in the restaurant industry, and the same or higher rates of tipping as Massachusetts.[9]

Wendyll Caisse (RWA) response to Fekkak:

The restaurant industry normally has a 30% labor cost (with a tip credit model) – retail has 11%. To put forth ROC’s version of this measure that not only raises the minimum wage but eliminates the tip credit is an experiment that has never been done before. Full service restaurants will have a 400% cost increase in their server pay line item, to most operators, this is simply not feasible without making drastic labor cuts or automating. ROC has not done the math. We can make changes as owners, but it will be at the detriment of our staff. Changing from a full service model to counter service for example, would allow an operator to cut their FOH staff by 75%. Additionally, some urban, high end operators may succeed with a 40% menu price increase – but there is no financial evidence that this model is sustainable for independent, mid-priced restaurants. RWA has put forth an escalation model, that doesn’t even speak to PEOD (Price Elasticity of Demand) in menu price increases, it is beyond irresponsible that a national, well-funded organization like ROC, with $9.8 million in total revenue in 2016, can’t give a financial model of a 400% increase in the tipped wage in Massachussets from $3.75 to $15 that they are promoting. The following RWA financial forecast is based on RaiseUp MA’s proposed ballot numbers with a small tip credit ($6) and tipped minimum wage of $9/hour. ROC’s proposed $15/hr minimum wage (and NO tip credit) would have an even more devastating impact.

Screenshot_20180501-172322

This model doesn’t ever consider an increase in rent. Restaurant owners want to know how they can operate – WHILE KEEPING THEIR STAFF – when labor costs increase from 30% to 49% when you only have 5% profit?!?

——————————————————————————————————–

Considerations for #4:

After the Maine legislature failed to act, in a ballot question in November of 2016, voters elected to eliminate the tip credit by 2024, bringing both the tipped minimum wage and regular minimum wage to $12/hour. After a period of confusion, restaurant servers, cooks, staff, and owners, along with vendors and other tertiary businesses, joined together in a grassroots campaign to reinstate the tip credit. After gaining momentum on social media, holding meetings and rallies, and appealing and presenting their case to state legislators, the campaign was successful. I have reviewed several of the documents used in the campaign, media accounts, and communicated with servers and restaurant owners. Some of the items they used in their argument included:

  • Server tips and take home pay was lower because some customers were confused about the implications of the new minimum wage laws. There was a perception that customers didn’t need to tip, or could tip less because servers were now making much more money.
  • Eliminating the tipped minimum wage by 2024 would result in a further decrease in net income to servers.
  • The public was not ready to adopt a “tipping included” cultural shift.
  • Serving is a “real job” that many folks choose and enjoy for a variety of reasons that work for them.
  • ROC and other out of state lobbyists had no business imposing their agenda on the people of Maine who disagreed with the threat to their livelihoods in full service restaurants. And the lobbyists weren’t using realistic, sustainable, business models to make their case.
  • Restaurants with normal debt service would face significant financial challenges to stay open. A full service restaurant cannot survive a 320% server labor cost increase from $3.75 in 2016 to $12 in 2024 without automating and/or cutting jobs and hours. From Wendyll Caisse, ME restaurant owner, and current RWA (Restaurant Workers of America) Treasurer in her testimony to Senator Volke, Representative Fecteau, and members of the Labor, Commerce, Research and Economic Development Committee: Let’s use $1M full service restaurant model for an example. A full service generally makes 5% profit. With the tip credit removal our labor percentage moves from an industry average of 30% to 49% in 2024 when servers make $12/hour. The 50K profit from 2016 transforms into a $145,216 deficit in 2024. That’s with no increases registered for COG’s (cost of goods) and NO MENU PRICE INCREASES, and not a penny for retained earnings which is extremely important in seasonal Maine.
  • Projecting out to 2024 with servers making $12/hour, the prospect of finding staff willing to fill those positions was not good. One restaurant owner noted that in 2016 the average income for her servers working 30 hours/week was $44,850. At 30 hours/week at $12 in 2024, gross pay would be $18,720. Given the new cultural paradigm, tips above that could not be counted on.
  • Raising menu prices to cover the additional labor cost meant running the risk that customers would stop coming or dine out less, especially folks on fixed income where even small increases have a big impact. If an egg salad sandwich goes from $4.25 to $5.75, that might be enough to keep guests from coming in.
  • Eliminating servers and installing I-pads or order stations would obviously lead to a reduction of jobs and a less intimate hospitality experience.
  • Service charges to potentially make up some of the income reduction to servers are not legal in Maine (unlike CA, Seattle, or Alaska).
  • Exit strategies for restaurant owners (selling the joint for retirement) were more difficult because of the looming, prohibitive operating costs.
  • Closing their restaurants might be their only alternative.
  • The Maine Department of Labor recommended reinstatement of the tip credit.
  • The packed, 15-hour, hearing in April of 2017, with hundreds of restaurant workers at the Burton M. Cross Building in Augusta was one of the best attended public hearings in Maine history.

#4- If eliminating the tip credit and implementing ONE FAIR WAGE is in the best interest of all servers, workers, and restaurant owners, why did LD 673 pass reinstating the tip credit after careful scrutiny by the Labor, Commerce, Research and Economic Development Committee (11-2 favorable vote) and a bi-partisan legislative vote for reinstatement in Maine? Shouldn’t the reversal in Maine send a loud and clear message to Massachusetts, New York, and all other states considering elimination of the tip credit and tipped minimum wage to slow down and thoroughly consider the implications before passing legislation or a ballot initiative?

Fekkak Mamdouh:  The people of Maine passed the One Fair Wage ballot measure in November 2016. More people voted in favor of raising the wages of both tipped and non tipped workers than either Presidential Candidate.[10] After it passed – and before it was implemented – the National Restaurant Association (NRA) spent significant funds lobbying to overturn the ballot measure.[11] The NRA is a highly funded trade lobby representing the Fortune 500 corporate restaurant chains. It has lobbied heavily in every state, including Maine, to keep wages for tipped workers as low as $2.13 at the federal level and $3 in Maine. Corporate interests should not overrule the basic needs of working people to survive.

Wendyll Caisse (RWA) response to Fekkak: 

As an active member in the Restaurant Workers of Maine, which was simply a Facebook Page started by a server by the name of Jason Buckwalter from Bangor; I can attest that we did NOT receive even a phone call from the NRA during our grassroots effort of 5,000 servers – and absolutely NO funding – we didn’t even have a bank account! The tipped wage information cited here for Maine is incorrect. After the referendum passed by a slim margin in November, many voters were not even aware of what they had voted for, as the elimination of the tip credit was 1 part of a 3-part question. The start of the wage escalation was implemented on January 1, 2017, the tipped minimum went from $3.75 per hour to $5.00 and the minimum wage went from $7.75 per hour to $9.00. The people most intimately affected by the loss of the tip credit were the ones asking for the reinstatement.

———————————————————————————————————–

Considerations for #5 +#6:

 I’ve spoken and communicated with several full service, MA restaurateurs who have run the hard numbers of escalating wages and costs. Many are very concerned about their ability to hang on, especially after an awful, extended winter. (One MA restaurateur just paid $6,400 in a penalty for their employees on MA Health Connector for 2017. That is in addition to what they pay for employees on their restaurant’s health insurance plan that has tripled over the last 8 years.) Given the business model realities of many restaurateurs, the prospect of eliminating the tipped minimum wage and paying all of their servers, bartenders, and tipped workers the full minimum wage threatens the survival of many independent restaurants. There are some folks in unique situations where they own the real estate their restaurant is located within, they have no mortgage or investors to pay, and no debt service, but those circumstances are rare. And some exist with unique financial resources such as grant money, donations, and/or wealthy benefactors. I’ve read a lot of ROC United’s published work, including some of the pieces put forth by the Food Labor Research Center at UC Berkeley where Saru is founder. In all of your work, I have not seen a viable proforma of how a ‘typical’ restaurant, with ‘normal’ debt service is expected to survive in a full minimum wage environment. I would love to see one with verifiable backup.

General Guidelines from Chron: According to Randy White, CEO of the White-Hutchinson Leisure & Learning Group, a consulting group, the cost of labor and food at a restaurant should ideally be less than 60 percent of the revenue you bring in. Labor should be less than 30 percent of the revenue. Depending on the type of restaurant you run, though, costs may be higher or lower. For example, if you run a full-service, white-tablecloth restaurant, your labor costs will most likely be higher than if you run a casual dining restaurant, since you will employ more staff to provide a higher level of service.

#5- If a restaurant previously had a tipped minimum wage of $3.75 (current in MA), and the tipped minimum wage went up to $15/hour, even gradually over 5-6 years, what would ROC United’s advice be to owners of FULL SERVICE restaurants (with servers, no automation) to keep Prime Cost under 60%? How much would an owner need to raise their prices to achieve 60% prime? Do you acknowledge the risk of your experiment and why so many restaurant owners are fearful of it?

#6- With the elimination of the tipped minimum wage and ROC United’s Fight for $15, what is the ‘new’ labor cost percentage goal if servers are making $15/hour?

Fekkak Mamdouh (Responses to #5 + #6): Restaurant owners in seven states – Alaska, Minnesota, Montana, Oregon, Washington, Nevada, and California – keep their prime costs well under 60%, and are thriving. The NRA’s data projects that these states will grow faster than the subminimum wage states.[12] California is home to some of the fastest-growing restaurant chains in the country; growth would not be possible without profit.[13] These seven states have higher restaurant sales per capita, higher job growth in the restaurant industry, and the same or higher rates of tipping.[14]

Even in New York, the tipped minimum wage has gone from $3.15 to $8.50 over the last several years, and most restaurants keep prime costs well under 60%. The New York restaurant industry has grown significantly over the same period that the tipped minimum wage has risen.[15]

We have 500 restaurant owners, many of whom are from the seven One Fair Wage states and New York state, who would be happy to share data on how they have managed to raise tipped workers’ wages, many to $15 an hour. All of those OFW states have a treasure trove of information on how to grow WITH their workforce that the Other NRA could share with restaurants around the country if they were so inclined. We invite restaurants to join RAISE and meet high road restaurateurs from around the country and discuss their business models. The National Restaurant Association has certainly spread fear among restaurant owners based on misinformation and calumny.

Patrick Maguire response: Fekkak, I would love to see the data from the full service restaurants in the 7 ‘One Fair Wage’ states operating at prime costs “well under 60%” that are “thriving.” Has this data been presented to the legislature, the Labor Committee and all parties currently negotiating in Massachusetts?

Wendyll Caisse (RWA) response to Fekkak:

To loosely say “One Fair Wage States’ is disingenuous, as all of the seven states have significant carve outs and lower minimums than any of the current legislation ROC is promoting. These states added language to make the financial model of full service restaurants remain viable:

  • Alaska: Statewide minimum wage of $9.80 (See below).
  • California: Minimum wage applicable to employers with 25 employees or less: $10; applicable to employers with 26 employees or more: $10.50.
  • Minnesota: Large employer, an enterprise whose gross volume of sales made or business done is not less than $500,000, has a minimum wage of $9.50; a small employer, an enterprise whose gross volume of sales made or business done is less than $500,000, has a minimum wage of $7.75 as of August 2016.
  • Montana: Business with gross annual sales over $110,000: $8.15; A business not covered by the Fair Labor Standards Act whose gross annual sales are $110,000 or less may pay $4.00 per hour. However, if an individual employee is producing or moving goods between states or otherwise covered by the federal Fair Labor Standards Act, that employee must be paid the greater of either the federal minimum wage or Montana’s minimum wage.
  • Nevada: With no health insurance benefits provided by employer and received by employee: $8.25; with health insurance benefits provided by employer and received by employee: $7.25.
  • Oregon: $9.75
  • Washington: $11.

…..and this is the result even in Alaska at $9.80:

“BigRuss” on Apr 1, 15 at 1:40pm, (Commenter on Fodors.com travel site for Alaska, one min. wage state, at $9.80/hr):

“Anchorage and the Kenai Peninsula probably have more competition and more access to supplies than anywhere else in Alaska and the dining prices are 30-50% higher than what you would expect to pay in the lower 48; yes, even in NYC or San Francisco.”

ROC chose not to answer the second part of #5 above, “How much would an owner need to raise their prices to achieve 60% prime?” It’s between 20-40% depending upon how much an operator reduces staff, if an operator automates, the menu price increases would be closer to 12% (plus traditional inflationary increases) over the course of the Massachusetts escalation. It’s a math issue that will be absolutely unsustainable for our rural locations and customers on fixed budgets.

——————————————————————————————————————————

Considerations for #7:

Leslie Stahl conducting an interview with Sara Jayaraman on 60 Minutes Overtime on 4/15/18:

Leslie: “… you can see that if you’re wanting to get a tip and a guy reaches out, you’re probably not going to slap his hand.”

Saru: “You have no choice. You’re living completely off your tips. You have to put up with whatever the customer does to you.”

[End of interview excerpts.]

That’s not true. In well-run restaurants (and all businesses), sexual harassment and inappropriate behavior from customers, employees, vendors, or anyone is not tolerated. Strong servers, managers, and owners take a stand, intervene, and follow up aggressively and thoroughly to protect the well being and rights of their employees. They are proactive and ensure that their staff knows how to quickly and decisively escalate a bad situation, and they make sure that communication and support systems are in place to follow up.

Erin Wade, co-founder and chief executive of Homeroom restaurant in Oakland, CA wrote an Opinion piece for the Washington Post on March 29, 2018 titled, I’m a female chef. Here’s how my restaurant dealt with harassment from customers. Here are a few excerpts:

“What’s needed is a conversation about women — not as victims, but as revolutionaries. I am an overtly feminist restaurateur, and harassment still happened at my restaurant. This is my story, my solution and my call to action.”

“Women of America’s businesses — please share your suggestions for solving the problems plaguing your workplace. This moment is ours — let’s take hold of it and make the world listen.”

From the Raleigh, North Caroline News & Observer on 10/26/17:

“In Raleigh, chef Ashley Christensen took to social media to call on restaurants to reevaluate kitchen culture, its reputation and its reality, and ensure environments are safe and respectful. In a statement posted on Facebook, Twitter and Instagram, she commended the bravery of the Besh Restaurant Group accusers and denounced the allegations.”

Quotes from Ashley’s social media from within the piece:

“The issue of sexual harassment is extremely important to me, to my company, and to the industry as a whole.”

“We also have a great HR director, who we hired about 18 months ago, and her guidance has been invaluable. She is directly available to all of our staff to address any of their concerns, positive or negative. Additionally, our managers will direct employees to her if they feel we’re anywhere close to a topic that may require her skill set. I think it’s almost impossible as a business owner to review situations between employees in a truly neutral manner, and having a skilled HR director allows us to provide that resource and safe zone to our team. Everyone deserves that. I think many independent restaurant owners view investment in an HR presence as too costly. I have to say, I think it’s the most important investment we’ve ever made.”

“I applaud the women who came forward and admire the bravery that it took to do so. While these reports are difficult and disheartening and confusing, I’m grateful for the spotlight that it’s shining on the work that needs to be done. Lewd language and behavior is so often overlooked or tolerated in restaurants and as leaders, we have to take the steps to cleanse our industry of this. I think even the most engaged, well intentioned hospitality groups out there can probably find opportunities to be better, safer, more respectful. So let’s get to it.”

Dawn Lafreeda, owner-operator of Den-Tex Central, which owns 81 Denny’s restaurants in an Opinion piece in the Wall Street Journal on 4/12/18:

Don’t Blame Tips for Sexual Harassment – Waitresses see gratuities as a great feature of the job.

From the piece:

For years I was told that running a full-service restaurant was a man’s game. I still remember the response from the banker I approached in 1984 to open my first company account: “Young lady, are you sure you’re not the waitress?” I was a waitress at one time—saving my tips and maxing out credit cards to buy my first restaurant—but not that day.

A lot has changed. Today I’m the owner-operator of 81 Denny’s restaurants across the South and Midwest. I don’t get many double-takes when I try to open a bank account, but I still encounter people who suggest women can’t fend for themselves in the restaurant industry.

Consider the claimed link between sexual harassment and tips. Because female servers earn most of their compensation through tip income, the narrative goes, they’re forced to put up with bad behavior from customers. We’re told that women are powerless victims, so dependent on the customer for their next dollar that they’ll tolerate any boorish behavior.

But that doesn’t describe the thousands of women I work with. Servers in my restaurants, especially women, don’t see tip income as a drawback. It’s a great feature of the job. Having cash at the end of the day—and not just on payday—helps a lot. Bad behavior is an occasional problem in any industry, but blaming the tipping system insults millions of women who benefit from it.

Yet some want to do away with tipping. New York Gov. Andrew Cuomo is considering a proposal to eliminate the lower minimum wage for tipped workers. This could lead to the end of tipping.

The theory is that replacing tips with a higher base wage will reduce sexual harassment. In reality it will result in less take-home pay for a large section of the hourly labor force. New York restaurateurs have already learned that lesson the hard way. Servers are fleeing restaurants that try higher base wages in lieu of tips. Some 97% of restaurant staff prefer the status quo to a tipless alternative, according to data from Upserve. Even a base wage of $20 an hour wouldn’t compensate many servers for the income they would lose if tips disappeared.

Forbes Magazine published a piece by Michael Saltsman of the Employment Policies Institute on 3/6/18 titled, Sexual Harassment Is Awful. But It Has Nothing To Do With Tipping.

From the piece:

“(Restaurant Opportunities Centers United (ROC United) is a controversial labor advocacy organization with its own history of alleged bad behavior; it was even sued by its own employees for illegal firings. But ROC’s profile has been rising in recent years, with celebrities such as Jane Fonda and Amy Poehler embracing its cause (if not the restaurant servers that ROC claims to represent).”

“Some version of ROC’s “tipping = harassment” claim has been repeated hundreds of times by ROC, its surrogates, and reporters who apparently believe it’s too good to check. But the errors are numerous, and start with the fact that ROC doesn’t even cite its own research accurately. (I reached out to ROC and offered its team the opportunity to comment on this and other critiques of its report, but did not hear back.)”

“This column has previously debunked the dubious economic benefits of raising the tipped wage. And the analysis above makes clear that the sexual harassment angle is equally flawed. If servers oppose the “raise,” and there’s no good policy rationale, the question remains: Why would policymakers propose changing such a beneficial and widely-favored status quo?”

#7- Saru, Fekkak, Sekou, and ROC United leadership- I believe that commingling the issues of sexual harassment and server compensation (via tipping and tipped minimum wage) is a strategy being employed by ROC United (with cherry picked data) to mislead and exploit the very people that you are claiming to be advocating for. And many of the Hollywood folks jumping on the morality bandwagon are enjoying the optics of the crusade, but are misinformed and unaware of the crucial details (and math) of how a cause they claim to be champions of could actually harm many individuals and small businesses. There should be more time, effort, and energy focusing on facts, education, and compromise to benefit servers and all workers rather than all of the divisive rhetoric against ‘rival’ lobbying groups. I welcome your response to my statements and anything cited above following question #6.

Fekkak Mamdouh:  There are now multiple sources of research and investigative journalism that corroborate that a mostly female workforce of tipped workers (two-thirds of tipped workers nationally are women) having to rely entirely on tips for their income subjects them to sexual harassment from customers, co-workers and managers. We surveyed 688 workers nationally on the issue; nearly 90% said they experienced sexual harassment as a result of having to tolerate inappropriate customer behavior to feed their families in tips.[16]These workers reported that because co-workers and managers knew that the women in tipped positions relied on them to earn their income in tips, these co-workers and managers had the power over these women to exact sexual favors. These workers also reported that managers told them to ‘dress more sexy, show more cleavage, and wear tighter clothing’ in order to please customers and earn more income in tips.

Workers in the seven One Fair Wage states reported experiencing sexual harassment at half the rate of the states that require restaurant owners to pay the subminimum wage of $2.13 an hour. Workers in these states reported that because they received a full wage from their employer, and tips were on top of that wage, they did not have to tolerate anything and everything from customers in order to feed their families entirely in tips. Workers in the seven One Fair Wage states also reported that managers told them to dress more sexy, show more cleavage, or wear tighter clothing in order to make more money in tips at one third the rate of states that only require employers to pay the subminimum wage of $2.13 an hour. Again, women in the seven states have wages in addition to tips, and so they do not have to accept disrespectful behavior to receive income.

We conducted this research because so many women servers and tipped workers came forward to us and shared their stories of sexual harassment in the industry, and how their experience of sexual harassment was directly connected to having to live entirely off of tips rather than receiving a wage from their employer with tips on top. Most of the celebrities working with ROC worked as servers and tipped workers in their youth and experienced sexual harassment themselves as tipped workers. So our campaign is based both on a great deal of research and facts and the lived experiences of millions of women and men across America.

Patrick Maguire response: Fekkak, you painstakingly provided 18 footnotes for several items, but did not provide any to support your opening comments, “There are now multiple sources of research and investigative journalism…” 

Please provide a copy of the survey and the method of choosing the 688 workers that you mentioned above.

Wendyll Caisse (RWA) response to Fekkak: 

The perpetrator of harassment bares the sole responsibility of their deviant behavior because to point blame on the compensation system removes the blame from the accused. Sexual harassment is a cultural problem that we are finally beginning to address, and if solving this social issue was as easy as a wage discussion, on street harassment wouldn’t be the most prominent situation that harassment is experienced in. RWA in no way acknowledges any ‘reports’ executed by ROC because of their flawed methodology, such as using IP addresses for the One Wage states vs. doing focus groups and interviews. Additionally, we at RWA hold their interviewer training and interviewer ‘drawing’ techniques as highly suspect. This is from ROC’s interviewer training manual:

Screenshot_20180501-183632

Fekkak states above that 90% of their respondents had experienced sexual harassment, but in reading their ‘report’ they include everything from off-color jokes to being asked out on a date, and this 90% also includes management, as I said, their ‘research’ is not viable. With all of this, the numbers are naturally inflated from, say, what would be reported to the EEOC. They also lump responses from current and former restaurant workers. Also, oddly in this same ‘report’ here’s this direct quote on page 10, “ROC United has gathered over 5,000 surveys of restaurant workers around the country examining wages and working conditions.*(42)* Over ten percent of workers surveyed reported that they or a co-worker had suffered from sexual harassment.

*(footnote 42)*  ROC-United analysis of National Behind the Kitchen Door (BKD) Database, 2014

I would say this means that ROC has spent a lot of time and money crafting language in their boilerplate reports that suit their agenda, but happily for the millions of workers in the restaurant industry, ROC has found that close to 90% of the workers surveyed have never suffered from sexual harassment, nor have their co-workers.

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Considerations for #8:

From Politico’s Morning Shift Newsletter on 3/29/18:

TIP TIFF IN NEW YORK: A pro-tipping restaurant organization attacked supporters of a plan by New York Governor Andrew Cuomo to end the state’s lower tipped wage. “Thank you for your concern. But we don’t need your help, and we’re not asking to be saved,” said the Restaurant Workers of America, a group that opposes ending tip credits. The group was responding to a letter sent last week by 16 prominent film and TV actresses (including Jane Fonda, Reese Witherspoon, and Natalie Portman) that urged Cuomo to raise the minimum wage for tipped workers. The letter said that tipping results in higher rates of sexual harassment in the restaurant industry.

But the RWA contends the actresses were “misled” by the Restaurant Opportunities Center United, a worker advocacy organization, into believing restaurant workers are “helpless victims of sexual harassment.” ROC United President Saru Jayaraman accused the RWA of being backed by the National Restaurant Association, and pledged to furnish proof next month. But both the National Restaurant Association and Restaurant Workers of America  denied any financial ties between the two organizations. “Once again ROC is wrong. … The National Restaurant Association has never made financial contributions to Restaurant Workers of America,” said Cicely Simpson, a spokesperson for the National Restaurant Association.

#8- Has the pledge to furnish proof of the accusation that RWA is being backed by the National Restaurant Association been followed up on by Saru or anyone at ROC United?

Fekkak Mamdouh:  Restaurant owners who are part of the National Restaurant Association funded the launch of Restaurant Workers of Maine, which then launched Restaurant Workers of America. The RWA has admitted it receives no money from restaurant workers, only restaurant owners.[17] The NRA funds the RWA to travel around the country to oppose higher wages for restaurant workers.[18]  (Fekkak Mamdough footnotes are included at the end of this blog post.)

Wendyll Caisse (RWA) response to Fekkak:

While some of the above answers are disingenuous, this response is a patent lie. The Restaurant Workers of Maine was simply a Facebook group of 5,000+ servers, started by a server that received ZERO funds and never had a bank account. The RWA is not funded by, nor connected to, the NRA. As the Treasurer of this new 501c4, I was happy to see numerous $1 and $5 membership fees coming in from tipped servers across the country; there have been no deposits from the NRA. Again, ROC has made another false statement; we HAVE received funds from restaurant workers. Through the generosity of our restaurant community, our board members have been able to enjoy low travel expenses due to people offering rides, couches, and meeting accommodations at no cost to us.

Summary response from Wendyll Caisse (RWA):

I need to highlight a few extremely-concerning false statements that ROC made. ROC dismisses our grassroots victory in Maine by suggesting the National Restaurant Association spent “significant funds” to undo it. If you look at their source for this claim, it doesn’t even support it — it’s a FEB 2016 newsletter  that relates to a minimum wage ballot measure in the city of Portland. In February 2016, the statewide initiative wasn’t even qualified for the ballot yet! So it’s unclear to me how ROC can justify its claim about something in 2017 using a Feb 2016 newsletter.

“After it passed – and before it was implemented – the National Restaurant Association (NRA) spent significant funds lobbying to overturn the ballot measure.[11]”-Fekkak Mamdough ROC United

Wendyll Caisse: The tipped wage information sited by ROC for Maine is incorrect also. After the referendum passed by a slim margin in November, the start of the wage escalation was implemented on January 1, 2017, the tipped minimum went from $3.75 per hour to $5.00 and the minimum wage went from $7.75 per hour to $9.00.

This section below is what’s most concerning to me. While I’m flattered that ROC is apparently tracking our activity very closely, it’s frankly insulting that they would make such false claims and expect no one to question it.

“Restaurant owners who are part of the National Restaurant Association funded the launch of Restaurant Workers of Maine, which then launched Restaurant Workers of America. The RWA has admitted it receives no money from restaurant workers, only restaurant owners.[17] The NRA funds the RWA to travel around the country to oppose higher wages for restaurant workers.[18]” -Fekkak Mamdough ROC United

Wendyll Caisse (RWA):

Let me be clear:

1) No one “funded” Restaurant Workers of Maine — we didn’t even have a bank account! Servers and owners each chipped in where necessary to cover signs, buttons, t-shirts, etc –that’s it. We did what we did without funding.

2) We never said we receive “no money” from restaurant workers, and the article ROC links to doesn’t say that, either. In fact, even though we waived servers’ dues for the first year, we’ve nevertheless had a number of employees who’ve voluntarily chosen to join as paying members because they support our cause so strongly.

3) This statement — “The NRA funds RWA to travel around the country to oppose higher wages for restaurant workers” — is categorically false. I’m the treasurer of RWA, and I’d know if we were receiving support from the NRA. We’re not — zip, zero, zilch, nada. Amusingly, ROC gives a 2017 citation to support this — and we didn’t even launch our group until 2018.

Response to Fekkak Mamdouh’s answers from Massachusetts Restaurant Association:

Stephen Clark-Director of Government Affairs MRA (sclark@themassrest.org) and Bob Luz-President & CEO MRA (BLuz@themassrest.org):

ROC, which is funded by national labor unions, continues to mention Fortune 500 companies and a $2.13 federal tip wage. The reality is that less than 2% of tipped employees in Massachusetts work for a company on this list (a list made up of some of the largest companies in the world, not the Sunday morning diner, the local Friday night dining spot or even the lunch place that just opened that you have been meaning to try). The Massachusetts restaurant industry is made up of small, independent restaurant owners and these are the restaurants on Main Streets in every town in Massachusetts.

 The Massachusetts tip wage is currently $3.75, and each tipped employee is guaranteed to earn a full minimum wage (currently $11/hr) for all hours worked. The tip wage allows the highest percentage of employees in a restaurant to earn the highest average wage, with many tipped servers earning in excess of $25 or $30 per hour. Massachusetts tipped employee wages have increased 84% in the last 15 years and currently has among the highest tipped wage earners in the country (hourly tip wage + declared tips), topping even California which has no tip wage. Any increase in the starting wage automatically increases server wages. Whenever an operator is forced to increase menu prices, the amount left for a tip increases as well. There are 80,000 tipped employees in our state that choose to work in our local restaurants and they are not asking for the change, they understand the economics of a restaurant and recognize they are maximizing their earning potential under the current system.

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Future items for discussion beginning with Tipped Minimum Wage-Part 2:

General Topics:

  • Follow up on every item in Part 1.
  • Proof of who is telling the truth and who is lying to their ‘constituents,’ the public, and why.
  • “Follow the money” of all lobbyists and advocacy groups. What is their true motivation and ‘end game?’
  • Timing of MA legislative action and ballot initiative.
  • Definition of “Tip Credit.”
  • Political, ‘Think Tank’ machines with financial, self-fulfilling motives vs. bare bones, grass roots initiatives.
  • Unintended, counter-intuitive consequences of proposed advocacy of workers. Lower net compensation, reduced staff shifts/hours, less full service restaurants.
  • Public records, including salaries and expenses of all non-profits involved.
  • Deep dive into data of 7 ‘One Fair Wage’ states. (Include discussion of state-specific service charges, admin fees, etc. in comparing states.)
  • Math/ financial models of real MA restaurants and the impact of proposed changes. How will independent, full service restaurants thrive, not just survive? Can a creative compromise work?
  • Math, data, and facts from as many resources as possible.
  • Breakdown restaurant types from no service, no tips/casual to full service, full liquor, fancy. One size does not fit all. Let operators adopt what works for their business.
  • ‘Celebrity’ crusaders. What exactly do Jane Fonda, Lily Tomlin and others know, and what are their sources of information?
  • Lack of media coverage/awareness of the details in Maine before ballot vote. Preventing the same outcome through education in MA, NY, and elsewhere. Simplifying the message.
  • PEOD-Price Elasticity of Demand. Statistics on impact of increased menu prices and what the public will tolerate.
  • Educating the public about the realities of the low profit margins for independent, full service restaurants.
  • New MA EMAC (Employee Medical Assistance Corp) supplemental tax for restaurants up to $750 per employee per year.
  • Higher minimum wage raising all other hourly wages at the restaurant.
  • Increased minimum wage taking money away from fairly compensating other staff, as well as restaurant improvements.
  • The gradual increase only prolongs the agony before the demise of independent, full service restaurants.
  • Restaurateurs have already been aggressively reducing costs every way possible. Don’t tell them they need to start now.
  • Comparison of revenue per employee for small businesses (5-10k) vs large companies.
  • Creating a fair and reasonable legal framework and let the entrepreneurs and the free market decide what works best for individual operators.
  • Specific actions workers and restaurateurs can take to advocate for their income and livelihoods.
  • Alternative creative solutions if MA legislature doesn’t act and ballot question fails. (Matt Mazzotta’s proposal.)
  • Break RaiseUp MA ballot question into 2 parts, full minimum vs. tipped minimum?
  • Cambridge, MA cafes closing earlier due to labor costs. Boston Globe 9/26/17.
  • Boston Globe, 10/24/17-Dudley Dough in Roxbury, MA and lessons learned about labor costs.
  • Globe MagazineThe Citgo Sign Has a Dark Side. Should Boston Care? Commingling the social contract of tipping with slavery.

ROC United:

  • Salaries, travel, office and lobbying expenses, and grants for ROCU listed on form 990, including 2017, when available.
  • Food Labor Research Center at UC Berkeley (Salaries, data ‘gatekeeper,’ does public access to all data and methods?)
  • NYT “Dear Sugars” Podcast 3/24/2018 (Data to support claims about 7 states that ‘did away’ w/tipped minimum wage. IHOP, Applebees, Denny’s, and Olive Garden Workers vs. tipped workers at independent restaurants. “Systemic situations of structural power, story at the end of the podcast empowering staff and strong leadership.)
  • Union affiliation/support? Is unionizing restaurant workers the end game?
  • ROC dues from individual worker members and restaurants.
  • Jennifer Schellenberg (RWA) in Washington Examiner on 3/12/18 on union dues and membership motivations.
  • Response to Wendyll Caisse (RWA) financial projections for MA restaurants 2108 vs 2024, “The MA Tip Credit Protects Jobs.” ROC projections/proforma vs. RWA forecast?
  • Julia Tavlas Capital Research Center piece dated 8/2/2013.
  • Comingling of issues to support the cause (Tipping, slavery origin, sexual harassment, bullying, power dynamics.)
  • Morality play/extremism of celebrity PR.
  • The crusade vs reality. Imposing what works for some with the moral high ground and guilt.
  • The history, operating model, and funding of COLORS restaurants.
  • EEOC (Equal Employment Opportunity Commission) stats vs. ROC stats, interview methodology, and demographics of participants. Rhetoric vs. reality.
  • Bureau of Labor Statistics median vs. mean and inclusion of tipped non-restaurant workers to skew the data.
  • Real restaurants. Real math. Working financial models and proof that eliminating the tipped minimum wage is the best model. This should be the foundation of the discussion.

RWA (Restaurant Workers of America)

  • Wendyll Caisse financial projection 2018 vs 2024, “The MA Tip Credit Protects Jobs.”
  • Financial models of real, operating restaurants redacting names to protect identity. Real math and the projected impact. Let’s compare all of the models in MA and every state before moving forward with legislation or ballot questions.
  • Initial perception of servers that they would benefit from the change vs. reality. Misconception of “higher base pay = more money.”
  • Maine People’s Alliance and Maine Small Business Alliance in Maine. Fact vs. Fiction
  • Member dues and funding.

NRA (National Restaurant Association):

  • Responses to items in Part 1?
  • Financials, member dues, and funding.

MRA (Massachusetts Restaurant Association):

  • Additional responses to items in Part 1?
  • Financials, member dues and funding.

Raise Up Massachusetts:

  • Response to items in Part 1?
  • Financials, funding.

The Alliance for Business Leadership

  • Response to items in Part 1?
  • Awaiting response from Nai Collymore-Henry
  • Finances and funding.

Servers, restaurant industry workers, and owners interested in supporting industry brothers and sisters in the fight to preserve the tip credit should follow and support the work being done by Restaurant Workers of America-RWA, and share their websiteFacebook pageTwitter, and Instagram platforms with your restaurant colleagues and everyone in your network willing to support you.

Stay tuned for Part 2. Feel free to join the conversation in the comments below, or email me at patrick@servernotservant.com with tips, information, and/or recommendations for future posts.

If you are interested in supporting the Server Not Servant blog and bringing the book project to fruition, please see the blue box on the right hand side of this blog post. Thank you –Patrick Maguire

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Fekkak Mamdouh Footnotes:

[1] Restaurant Opportunities Centers United (2018). Better Wages Better Tips.

[2] National Restaurant Association (2017). 2017 National Restaurant Association Restaurant Industry Outlook.

[3] 2011-2016 data for 722511 number of full service restaurant workers. Bureau of Labor Statistics. Quarterly Census of Employment and Wages.

[4] Average tipping rates for all states in 2016 and 2017 using Square data based on millions of observations. See Ferdman, R.A. (March 2014). Which US states tip the most (and least), based on millions of Square transactions. Quartz.; and Johnson, D. (August 2017). Find out which states give the worst tips. Time.

[5] Ibid.

[6] PayScale (2015). Best and Worst Cities for Food Service Workers.

[7] Fu, J. (February 2018). The Department of Labor’s tip-pooling proposal is a mess. The New Food Economy.

[8] Strong, A. (March 2018). Restaurant Owners and Managers Cannot Keep Servers’ Tips Per New Budget Bill. Eater.

[9] See note 1,2,3,4.

[10] Chin, B. (January 2017). Ditching personality politics for bold policies is how to win working class, rural Maine. Maine Beacon.

[11] Maine Innkeepers Association (February 2016). Legislative Happenings. INNterviews.

[12] See note 2.

[13] Technomic (2018). 2018 Top 500 Chain Restaurant Report.

[14] See notes 1, 2, 3, 4.

[15] Institute for Policy Studies & ROC United (2018). New York Saw Boost in Restaurant Worker Wages and Employment after Tipped Minimum Wage Increase.

[16] ROC United & Forward Together (2014). The Glass Floor: Sexual Harassment in the Restaurant Industry.

[17] Romeo, P. (February 2018). Restaurants Find an Ally in their Fight to Keep the Tip Credit: Servers. Restaurant Business Online.

[18] National Restaurant Association (2017). 2017 U.S. Restaurant Government Affairs Conference: Protecting America’s Industry.

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