Stealthy Poison: Minimum Wage Raise Linked Estate Tax Cut, Backdoor CUT for Tipped Workers

The above photo is of an unidentified waiter  at Colors, a cooperative restaurant in New York, opened by  the Restaurant Opportunities Center of New York (ROC-NY) (a non-union restaurant advocacy group co-founded in the spring of 2002 by Mamdouh Fekkak, a waiter who lost his job with the destruction of Windows on the World atop the World Trade Center.)  It accompanied an November 29, 2005 article, “Workers become owners at co-op restaurants”  by Jennifer Mascia for the Columbia University Graduate School of Journalism news service. Rafael Duran, ROC-NY co-founder, received the 2005 Cardinal Bernardin New Leadership Award.

 

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Why a picture of a waiter?  Yesterday, I promised to find the bill number for Checking at GPO access, I learned  H.R. 5970, links cuts in the estate tax to an increase in minimum wage.  Near the end, starting on page 181, it adds Title  IV under the rubric of “other purposes.”  Section 401 is the change in minimum wage which I cited yesterday from the AP account, which provided no bill numbers.

SEC. 401. MINIMUM WAGE.

Section 6(a)(1) of the Fair Labor Standards Act of 1938 (29 U.S.C.

206(a)(1)) is amended to read as follows:

“(1) except as otherwise provided in this section, not

less than–

“(A) $5.15 an hour beginning September 1, 1997;

“(B) $5.85 an hour, beginning on January 1, 2007;

“(C) $6.55 an hour, beginning June 1, 2008; and

Then the bill continues with Section 402, not mentioned by the AP, the  “Tipped Wage Fairness,” which amends Section 3(m) of the Fair Labor Standards Act.  Section 2 adds this  new provision especially helpful to the restaurant industry, which gets away factoring in tips from customers to justify paying  their wait staff $2.00 an hour.  The measure would cancel state-level laws that entitle waitresses, barbers, cab drivers and other workers to a minimum wage regardless of what they make in tips.

               “(2) Notwithstanding any other provision of this Act, any State or

political subdivision of a State which on or after the date of enactment of the Estate Tax and Extension of Tax Relief Act of 2006  excludes all of a tipped employee’s tips from being considered as wages in determining if such tipped employee has been paid the applicable minimum wage rate, may not establish or enforce the minimum wage rate provisions of such law, ordinance, regulation, or order in such State or political subdivision thereof with respect to tipped employees  unless such law, ordinance, regulation, or order is revised or amended

to permit such employee to be paid a wage by the employee’s employer in an amount not less than an amount equal to–

“(A) the cash wage paid such employee which is required under such law, ordinance, regulation, or order on the date of enactment of the Estate Tax and Extension of Tax Relief Act of    2006; and

“(B) an additional amount on account of tips received by such employee which amount is equal to the difference between the cash wage described in sub-paragraph (A) and the minimum  wage rate in effect under such law, ordinance, regulation, or order, or the minimum wage rate in effect under section 6(a), whichever is higher.”

Interesting tie- in to the Chamber of Commerce, who cites  the Employment Policies Institute , a front group created Berman & Co., a Washington, DC public affairs firm owned by Rick Berman who lobbies for the restaurant the restaurant industry.  Hm-m-m.

By the way, the Chamber of Commerce site had this verbiage on its page about the minimum wage, which I didn’t understand until I saw H.R. 5970:

The U.S. Chamber will continue to oppose an increase in the minimum wage. However, if such a proposal comes up, there may be companion legislation to help mitigate the adverse effect of a mandated wage increase on businesses, such as targeted reform of the Fair Labor Standards Act (FLSA).

Hm-m-m indeed!  Am still wondering what’s in that May article only available to members.

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One Response to “Stealthy Poison: Minimum Wage Raise Linked Estate Tax Cut, Backdoor CUT for Tipped Workers”

  1. Chamber of Congress & the Minimum Wage (7/29/06) | The Writing Corner Says:

    […] and Culture « The House Rules Committee, Hastert and One Party Jihad (07/28/06) Stealthy Poison: Minimum Wage Raise Linked Estate Tax Cut, Backdoor CUT for Tipped Workers […]

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