October 24, 2014

Texas tip wage remains stagnant

The tip wage in Texas hasn't risen in over two decades. If you’re currently enrolled in an Austin culinary arts program, the odds are decent that you make a point of experiencing new restaurants whenever possible. Still, in the flurry of new dishes, experiential dining settings and exciting new fads, it’s easy to lose sight of the people actually bringing your food. While any self-respecting customer will tell you the importance of properly tipping your server, this practice carries particular importance in Texas. In fact, according to the Houston Chronicle, the tip wage hasn’t risen in Texas in 23 years. Take a look at some of the details surrounding the situation, and be sure to tip your servers well next time you’re in the Lone Star State.

The tip wage
In order to properly understand the significance of Texas’ tip wage not changing, it’s important to take the national picture surrounding tip wage earners into perspective. As many of you may already know, the federal minimum wage currently sits at $7.25 per hour. This means that it’s illegal to compensate hourly employees below this mark, though many states already have higher minimum wages established. The same legislation dictates that employees who earn up to or more than $30 each month in tips can be paid a reduced wage to compensate for their extra earnings. That number, in states with a base wage of $7.25, is $2.13. In the event that an individual doesn’t earn enough tips to bring their average hourly earning to or above $7.25, they’re supposed to be compensated up to that point by their employer. Regrettably, this is not always practiced, as documentation of tip earnings can be tricky.

Those affected
Too often, Americans tend to associate tipped work with younger employees such as high school kids trying to make some extra cash on the side. While this is certainly part of the population of tipped workers, the demographic is far broader than one might think. The Economic Policy Institute has estimated that roughly 4.3 million individuals across the nation work in a tipped wage environment. Further, nearly 2.5 million, more than half of the total group, are servers, bartenders and other food service employees. The same institute has reported that over 30 percent of tipped workers are supporting children on their wages, a feat that seems nearly impossible when you dote on the financial reality of $2.13 an hour.

Reform efforts
There’s been a great deal of call for states such as Texas to raise the tip wage independently of the federal government. Regrettably, this process seems to have hit a snag in its progress. The District of Columbia, in addition to 24 other states, have raised the minimum tipped wage above the $2.13 mark. Some states on the West Coast have passed legislation requiring that their tipped workers be paid at least the state minimum wage and are allowed to keep their tips on top of that. Texas, though, has not raised the mark in more than two decades, becoming one of more than 20 remaining states to do so. While there is certainly ample reason to pay our wage and tip earners more at a legislative level, inaction from the federal government has led many to wonder how long these states will continue to underpay their service workers. With the vast amount of restaurant expansion in Austin and other Texan cities, the Lone Star State may be a prime candidate for new legislation to raise the compensation of these individuals.