January 23, 2019

Wage law delay requests pits interests of tipped workers, restaurants

Server Patrick Mahoney takes an order at Worcester eatery deadhorse hill. The restaurant plans to offer the same level of service as wages increase.

The coalition behind last year's successful bill raising the minimum wage says the restaurant industry is trying to backtrack on part of the legal agreement, which an industry official says has created a "logistical nightmare."

In an unsigned letter delivered Gov. Charlie Baker and legislative leaders on Tuesday morning, Raise Up Massachusetts said a provision of the 2018 "grand bargain" law required that beginning on Jan. 1, 2019, employers who pay their employees the sub-minimum wage for tipped workers must ensure that their employees receive at least the full minimum wage, including their tips, at the end of each shift.

"Under previous state law, employers could make that calculation weekly, which resulted in many workers receiving less than the minimum wage on slower days," the advocacy coalition wrote, citing the Massachusetts Restaurant Association's advocacy for a delay that the coalition says "would harm working people who already struggle with unpredictable low wages."

In its December newsletter, the restaurant association said it has been "actively meeting" with legislators and Gov. Baker to "delay and/or modify this legislation." Addressing compliance issues, the association wrote, "Operators are going to have to work with their payroll companies to make sure systems are in place to ensure minimum is earned for each shift. Otherwise, there would be risk of being liable for nonpayment of wages for every occasion this happens. The amount trebled could be the entire week's pay, not just the amount underpaid for any shift."

Restaurant association CEO Bob Luz told the News Service Wednesday that talks over the details of the grand bargain law included discussion of proposals dealing with a teen wage, a much lower tipped wage, different effective dates and different increases in the minimum wage.

"Our ask has simply been that a delay is needed before this section takes effect. There is no payroll nor point of sale system that is equipped to calculate this change," Luz said. "The American Payroll Association sent a letter to the Legislature back in September requesting a one-year delay. Time is needed for programs to be built and software to be tested and implemented. We continue to ask for a delay as every restaurant in Massachusetts has to calculate and report manually every single day. This is a logistical nightmare for restaurants to comply with no system in place. The Raise Up Coalition presented two ballot questions to get a $15 minimum wage and create a paid family leave program. They got what they want, I am not sure why they would oppose compliance."

The association is seeking a one-year delay in the wage reform, to Jan. 1, 2020, an official said.

In a Sept. 26 letter to House Speaker Robert DeLeo, American Payroll Association officials said a one-year transition period is needed and wrote that "without additional time to adequately address these new requirements, Massachusetts businesses will face significant additional costs and liabilities."

The minimum wage in Massachusetts rose from $11 to $12 an hour on Jan. 1 and is scheduled to reach $15 an hour by Jan. 1, 2022.

Raise Up Massachusetts is a coalition of community organizations, religious groups, and labor unions that has used proposed ballot question to help ensure increases in the minimum wage, an earned sick time law, and a paid family and medical leave law. The coalition came up short last year in its effort to put a surtax on incomes above $1 million per year, but is rallying around a redrafted constitutional amendment to restart that effort.

The coalition says it's "only getting started" and plans to continue efforts to address a Massachusetts economy that it calls "one of the most racially and economically unequal across the country." It describes its goal as ensuring that "every worker in Massachusetts has a livable wage, family-supporting benefits, and a transportation and education system that lifts people up, funded by the wealthy paying their fair share."

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