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Delaware restaurants plan to fight bill that would raise tip wages, raise costs for businesses

From Delaware Live

If signed into law, the bill would dramatically raise the base wage paid to people who earn tips. That could have a ripple effect that would actually destroy income for servers and bartenders; raise the cost of menu items; and put some restaurants out of business. It also will dramatically raise costs for employers who not only will have to pay nearly four times as much to servers, but must pay higher costs for things such workman’s comp insurance and unemployment benefits, which are based on payroll costs.

And everybody in the restaurant industry continues to point out: Restaurants still haven’t returned to full strength either in sales or employment and continue to struggle under COVID-19 restrictions. Changes like the a rise in the minimum wage or the tip wage will cause more and perhaps unsurmountable financial turmoil, they say.

Restaurants will advocate in full force against any effort that blocks their recovery, said Carrie Leishman, CEO of the Delaware Restaurant Association.

“We need the state to help do whatever it can to make restaurants healthy and whole so we can keep these people employed,” she said.

Right now, restaurants pay people who can earn tips $2.23 an hour. House Bill 94, introduced by Rep. Kim Williams, D-Newport, would raise that to 65 percent of the state’s minimum wage.

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