This letter was sent to David Toscano and Creigh Deeds by Socialist Party USA member in Charlottesville, Brandon Collins and is followed by the mediocre response from Delegate Toscano.
Currently, the Virginia General Assembly (led by Republicans) is working to strengthen Virginia's "right to work" laws as a response to the Employee Free Choice Act. We must resist "right to work" laws and this will be the focus, for now, of ongoing discussion with Delegate Toscano and other Virginia legislators.
It is a terrible thing that our lawmakers won't raise our wages, and simultaneously work to make it harder for us to organize to get better wages by our own efforts.
Socialist Party in Virginia supports the raising of wages for all workers, including tipped employees!
Honorable Delegate Toscano,
As a citizen and restaurant worker in the 57th district, I respectfully ask that you give serious consideration to introducing legislation raising the minimum wage for tipped employees in the commonwealth. I am aware of your past attempts to raise the minimum wage, and thank you for your efforts. Unfortunately, the raising of the tipped employee wage is often left out of attempts to raise wages.
The current national minimum wage for tipped employees is $2.13 per hour. This has been so since 1977, the rate of pay for tipped employees has remained that low for decades, and there has been no consideration for cost of living increases for tipped wage employees, mainly wait staff.
The current wage leaves many servers receiving paychecks for zero dollars, and thus, taxes still to be paid on the tips claimed, as the pay rate is too small to cover their tax obligation. When they make a certain amount in tips, taxes on those tips are withheld from paychecks, leaving the employee owing taxes after their paycheck. A server who makes close to a living wage off of tips, is then obligated to pay the commonwealth taxes at the end of the year. While most servers get most of their money back from the federal government, they are left owing the commonwealth taxes. These are working people struggling to pay bills, and to provide their own health insurance. A tax burden rather than a return is hurtful.
Many states require employers to pay more than the national $2.13/hour. Some states set the tipped employees rate at the current minimum wage, some have wages even higher. I suggest raising the rate to a level that leaves servers with some money left on their paychecks, after having taxes withheld. This could be configured by determining a living wage and making sure that the tax obligation can be met after employees receive a living wage through tips.
In the 57th district, a living wage is $17.22 per hour,(Economic Policy Institute- one parent one child) in an 8 hour shift that leaves $120.72 in tips after the $2.13 per hour times eight hours($17.04), the tax obligation on this for a 40 hour week would be around $175.94 Including Med, SS, Fed and Va taxes. This is higher than the $85.20 in wages paid by the employer ($2.13 x 40 hours)
Keep in mind that most restaurant workers don’t earn $120.72 in an 8 hour shift, and many don’t work 40 hours per week(17.22x40=688.80 wk) - (2.13x40=85.20 wage)= $603.60 tips wk
The average restaurant server in Virginia (Bureau of Labor Statistics- May 2007)earns $8.64 combined hourly and tips($7.30 median). Per week=$345.60-85.20=$260.40 tips (median=$292.00-$85.20=$206.80 tips) average 8hr shift=$52.08 tips
That leaves $2.27+$2.13= $4.40 Minimum wage to cover taxes($175.94wk) for those fortunate enough to earn a living wage combined($4.40/hr. x 40 hrs.) $176.00 + 512.80=688.80
At the current 2.13 that leaves a $10.02 paycheck after taxes for the average($260.40wk), if an employee makes just a small amount more than the average, that person is unable to meet the tax requirement ($75.18tax on $6.51/hr in tips)
An $8.58/hr increase to $10.71/hr would meet a living wage for average employees- avg. tips $260.40wk + $428.40($10.41 wage)= $688.80 living wage.
I would suggest an increase to the federal minimum wage for non-tipped employees($6.55/hr) as a compromised increase for tipped wage employees, somewhere between a living wage and the minimum increase needed.
Earning an average employee $522.40/wk with a tax obligation of $125.09,
With wages as $262.00, less tax($125.09)= $136.91 on a paycheck.
These figures may not be perfect, but are a pretty good representation of how income for restaurant servers could be improved. I am not an economist. Most restaurant employees spend at least an hour setting up, closing down, and doing side work while not earning tips, my belief is that these tasks deserve more than $2.13/hr., would likely have servers do a better job of things outside of taking care of customers, and offers some dignity to servers who are essentially working for free. I understand that a large increase might not be possible, but appreciate your best efforts to raise wage for tipped employees.
I thank you for your time and consideration,
E. Brandon Collins
(The Response Jan. 19, 2009)
Thank you for contacting me in support of increasing the minimum wage for tipped employees. As you may be aware, I patroned legislation to increase the minimum wage in Virginia for two years prior to the federal government taking action on this issue. Unfortunately, my legislation was unsuccessful, and the political climate has not changed significantly in the House of Delegates since that time. Additionally, while I agree that the minimum wage for tipped employees should be increased, the deadline to draft new legislation passed in early December. I will keep your request in my file for consideration in the next General Assembly session.
Please feel free to contact me at any time concerning legislative matters.
David J. Toscano