Dirty Rotten Scoundrels [updated]

Impoverished Ideology

If you thought the shell game that the Republicans were playing with the minimum wage bill was bad (inserting a provision to cut the estate tax - see this WaPo article for more), it gets worse. Check out this AP article in the Duluth News Tribune:

Tip money earned by waitresses in Duluth, manicurists in Hollywood and bartenders in Seattle is on the table in the nation's capital, as lawmakers scrap over an election-year, minimum-wage bill.

Minnesota, California and Washington are among seven states where workers get to keep their tips on top of getting paid their state's full minimum wage. In other states, tip-earning workers get paid less and make up the difference with tips.

A provision in GOP-written minimum-wage legislation passed by the House and under consideration this week in the Senate could change the law in those seven states -- the others are Montana, Alaska, Nevada and Oregon. It would deal a pay cut of $3 or more an hour to thousands of waiters, bellhops and hairdressers in those states, according to Democrats and labor groups.

[...]

Except for in the seven states at issue, employers of tipped employees now pay only a portion of the minimum wage -- starting at $2.13 an hour -- as long as the employees draw enough tips to make up the rest. A tipped employee is defined as one who regularly receives more than $30 per month in tips.

Under the GOP-written legislation, according to Democrats, that same system would go into effect in the seven states where employers now pay the full wage. So instead of getting to keep tips on top of their minimum wage in Minnesota, California, Nevada and the other states, tipped workers would be paid a base wage of $2.13 an hour and employers could use their tips to make up the rest.

I was tipped off to this by Daily Kos diarist cashew shortage (great name!), who explains further:

In a favor to the National Restaurant Association, the Republican minimum wage bill goes after states that have decided to protect tipped employees' wages. It preempts state minimum wage laws with respect to tipped employees (like waiters) where a state has not allowed an employer to use a "tip credit" against an employee's wages. This means that, in those states (namely, AK, CA, MN, NV, OR, WA, and MT) where state law has required employers to pay the full state minimum wage to wait staff, regardless of their tips, those employers may now only pay wait staff the federal tip credit wage of $2.13 per hour (the rest to be made up by tips, i.e., the tip credit). So waiters in Washington go from $7.63 per hour (the full state minimum wage) to $2.13 per hour (the federal tip credit rate), a $5.50 wage cut under the Republican "minimum wage" bill.

But guess what, folks... Here's the much bigger rub.

Federal law doesn't cover all employees. It only covers those employees at businesses that have annual gross receipts of at least $500,000. State minimum wage laws -- in all of the above described states -- are intended to capture all employees (with a few specific exceptions) at establishments above AND below the $500,000 gross-receipt threshold. So the beauty salon or the downtown pizza parlor that brings in $400,000 per year is covered by the state minimum wage laws but not the federal minimum wage laws.

But what does the Republican bill do? It says, if you're a state that does not allow the tip credit, your minimum wage law is UNENFORCEABLE with respect to tipped employees. So the only minimum wage law that is enforceable for tipped employees in such a state would be the federal law. The problem for thousands of tipped workers in these states is that their employer is not covered by federal law, only state law. They work at businesses with gross receipts of less than $500,000 per year.

So their employer has no minimum wage requirements once you preempt and render unenforceable the state law. These workers can then be paid 10 cents an hour. Or they can be paid no wage at all. They can be told that they are ONLY WORKING FOR TIPS. So a waiter at Jim Bob's BBQ Shack in rural Washington goes from $7.63 per hour in wages to $0 per hour in wages, only bringing home tips. If he works 8 hours one day and only makes $12 in tips, then that's all he gets to take home.

So I'm not completely certain that the last provision of zeroing out wages would be allowed - if anybody out there has some research on this murky and ghastly bill, please pipe up in the comments.

[UPDATE] Good news from this ThinkProgress flash:

Four Democratic senators who were being heavily pressured by lobbyists and conservatives to back the fraud minimum wage/estate tax bill being pushed through by Majority Leader Bill Frist have announced they will oppose the bill. Without the four lawmakers — Maria Cantwell (WA), Patty Murray (WA), Mark Pryor (AR), and Ken Salazar (CO) — Frist is currently at least two votes short.