It’s called the luck of being located. If you are lucky enough to be able to live in Alaska or California, Minnesota, Montana Nevada, Oregon, Washington State, or any other state, and you work in a job that relies on tips, you should be paid your state’s full minimum wageFor every hour that you work. But if you’re a tipped worker in one of 15 (mostly Southern) states, you earn just $2.13 an hour — a subminimum rate that has been in place since 1991. The remaining states — 28 and Washington, D.C. — pay workers more than $2.13 but less than the federal $7.25 hourly minimum.
And the variations don’t end here. For example: New York State ended the subminimum wageFor aestheticians, car wash workers and dog groomers, door persons and hairdressers, as well as tour guides, tow truck drivers, valet parking attendants and valet parking attendants. However, the 2020 minimum wage was not set for wait staff or bartenders.
What’s more, it’s not just tipped workers who are paid lawful, but outrageously low, subminimum wages. Disabled workers employed in a “sheltered workshop,” vocational education pupils, agricultural workers, prisoners, and full-time students employed in retail or service businesses can be paid less than minimum wage, thanks to a provision in 1938’s Fair Labor Standards Act.
However, there are also inconsistencies. Employers can pay workers under age 20A subminimum wage of $4.25/hour for no more than 90 days after they start their job.
Other employment categories are also unrestricted. This means that disabled workers in large parts of the country may work for pennies an hr forever unless they live in one the 14 states that have phased out the subminimumFor disabled workers
If you’re confused, you’re not alone, and labor activists are working hard to end the geographic diversity, raise wages for all workers and build worker power.
Before we parse this, here’s some history regarding how this hodge-podge came to be. According to the Center for American Progress tipping became common after EmancipationThis allowed Black workers to be exploited by businesses that paid them below the minimum wage. Many times, tips replaced fixed wages. It wasn’t until 1966 that the Fair Labor Standards Act was amended. It now requires a small subminimum wage for workers working in bars, restaurants, hotels, and other tippy occupations.
The subminimum for disabled workers has its roots in another discriminatory policy and rests on the idea that disabled workers — especially those with intellectual limitations — are less competent and need to be isolated from others. Frances Perkins, the Depression-era Labor Secretary was a supporter of this idea. She urged Congress to allow a lower wage for wounded World War I veterans who were having difficulty reintegrating back into the labor force. Those who “by reason of illness or age or something else are not up to normal production” would benefit, she testified. Her position gained popularity and, when the Fair Labor Standards Act was passed in 1938, it included Section 14(c)Employers will be able to pay disabled workers an unspecified but lower salary.
Fast forward 84 Jahre and you will find the average hourly wage for sheltered workshop participants is currently $3.34. According to the most recent data, the Department of Labor had 67,288 workers earning a subminimum wage as of July 2020. This is thanks to 14(c).
It is not surprising that disability rights groups are trying to raise the wages and eliminate workshops. Among other strategies, they advocate for legislation at the federal and state levels.
Support for their work is a key element. The Transformation to Competitive Integrated Employment Act, The legislation was introduced by Senators Bob Casey and Steve Daines (R.Montana), earlier in the year. Over a five-year period, the act will eliminate the subminimum wage paid to disabled workers in sheltered workshops. Rep. Bobby Scott (D.Virginia), introduced HR 2733, the House version.
“The Transformation to Competitive Integrated Employment bill will allow 14(c) to be gradually phased out. It has a long runway that will allow us to provide support and services to people transitioning from workshops to non-segregated jobs. It also ensures that people receive a fair wage in their new jobs,” Cyrus Huncharek, senior public policy analyst at the National Disability Rights Network?, told Truthout.
He also stated that the bill provides funding to assist businesses in integrating and accommodating these new workers.
Huncharek hopes that the phase-out will be a success and will benefit the disabled as well as the general population. “Typically, the work done by people in workshops is not stimulating and gives them no transferable skills; they’re stuffing newspapers, wrapping silverware in napkins. 14(c) was intended to be rehabilitative and assist workers in learning new skills. We need to assess people’s interests, skills, hobbies, and let this drive the work they seek. We also need to do whatever we can to help them integrate with the general population.”
Frank Pennisi is the disability rights and accessibility director at Southern Tier Independence Center in Binghamton. He agrees with this assessment and considers 14(c) outdated, unfair, and discriminatory. “Sheltered workshops were set up because people believed disabled people couldn’t keep up with people who are not disabled, but this is based on assembly work,” he told Truthout. “Not everyone is meant for this type of employment. Some people are better suited for retail or office jobs. One of our clients was rejected from a sheltered workshop. But, she found a job at a bagel store, where she took orders, cleaned tables, and greeted customers. She was there for 20 years.”
He said that it takes patience, creativity and patience to find the right job for everyone. “Over the years, only about 5 percent of people ever left workshops for [non-workshop] jobs,” and since most lack skills needed for employment outside the workshops, advocates need to help them acquire the training they need to transition. “It also takes time to shift expectations so that they are ready to be in an integrated environment,” he says.
Best practices, Pennisi continues, involve a job coach — a process called customized or supported employment — where someone stays with workers until they acclimate to the job. He says that only short-term support is required in a large majority of cases. Nonetheless, he acknowledges that “there are some people who will require some degree of coaching for their entire career.”
However, he believes that raising the wages for disabled workers and helping them to find work is a matter both of equity and social justice.
This applies to the tipped workers who comprise 8 percent of the U.S. workforce.
“Our mission has moved from just raising the wage to building worker power and bringing workers together,” says Teofilo Reyes, chief program officer at Restaurant Opportunities Centers United, ROC United. “Front and back-of-the-house workers have joined forces to support each other, recently coming together to comment on how to regulate side work. This includes all jobs that don’t require direct service to customers, such as cleaning and preparing food. We had approximately 1,000 workers weigh in, asking the Department of Labor to limit how much time a boss can demand workers spend on these tasks.”
Reyes says that workers are also coming together to fight racism and sexism. These tend to manifest as white workers, women in public-facing positions, and men and women of color in the back. Their efforts, he says, aim to “bridge the divide so that workers can support each other’s battles, pressure the bosses to make changes, and protect each other from racial, age and gender discrimination.”
It also supports workers who are victims of wage theft. This includes everything from refusing to pay overtime or denial of meal breaks to forcing servers to tip their supervisors. ROC United collected $2 million in lost earnings, which included more than 2,000 tips from supervisors. $375,000 owed to 188 Baja Fresh workers In southern California, 2021 alone
Reyes added that this is a great example of what workers can do when they fight back.
Diana Ramirez, senior manager of policy and coalition at the D.C.-based National Women’s Law Center and a former ROC staffer, describes her work as taking place at the intersection of wage and gender justice. “Two-thirds of tipped workers are women, so the subminimum is a big contributor to the gender wage gap,” she tells Truthout. “States with higher minimum wages have smaller wage gaps between men and women working in the same occupations. This is a racial justice issue because the majority of these jobs are held by women of color. Overall, women lose more $1 million in their lifetimes than they make as a group. This is their retirement fund, their college fund.”
The Center’s efforts are concentrated narrowly, with projects in Georgia, Mississippi and New Jersey. The Georgia center is home to the Respect Georgia Workers Alliancewas formed in February 2022. They worked with Rep. Teri Aulewicz for a bill that protects public employees from retaliation after sexual harassment complaints. Led by 9to5 Georgia, the coalition brought people who Ramirez says “are not usually at the table” together. “Of course, public sector workers are not the only ones who need protection, but it was a great start, a great way to show that regular folks can affect change,” she told Truthout.
Restaurant workers are another key constituency for the Center’s work, since the industry employs more single mothers than any other sector — more than 800,000 laborers — and the need for a higher base pay rate is obvious. A report by earlier in the year One Fair Wage, a national group that supports replacing the subminimum wage with a $15 hourly fee, with tips on top, found that “the subminimum wage has long forced a workforce that is overwhelmingly female to tolerate inappropriate customer and supervisor behavior because their income is so dependent on customer tips.”
Tsedeye Gebreselassie is director of work quality at The National Employment Law ProjectIt is unconscionable that both the federal minimum wage and the federal tipped minimum have not been increased in 30 years, says. “No other industry says that customers have to subsidize the wages that businesses pay their workers,” she says.
This is why Ramirez and Reyes advocates, as well as Gebreselassie, support two pieces federal legislation: The Tipped Workers Protection Act (HR8427), to require all employers that every worker receives the state minimum wages; and the Raise the Wage ActTo raise the federal minimum wage from $15 an hour to $15 an hour, and to phase out the subminimum wage for young, disabled, and tipped workers.
According to sponsor Alma S. Adams (D-North Carolina), a $15 hourly minimum will raise the wages of 32 million people — half of them women — including one-third of Black and one-quarter of Latinx workers.
Sen. Bernie Sanders (I-Vermont), introduced an identical bill to the Senate.
“We have to build worker power to win workplace justice,” Ramirez concludes. “Workers need to learn how to assert themselves and be the change in their communities. This goes beyond supporting legislation. It involves empowerment.”
