Restaurant workers oppose bill to raise minimum wage

A bill that would increase hourly wages for workers who receive tips is getting pushback from the workers intended to benefit from it.

With 659 members and growing, a Facebook group called No 2 HB94 is opposing House Bill 94 that could change the way the service industry operates.

Doug Moore, a bartender at Grain in Lewes and an organizer of the effort, said the bill could change the way people go out to eat in the area.

“It's really going to take the dining out of dining out. You're coming here for the experience and you're going to tip on top of that. That's why we have regulars and people who come back over and over,” Moore said. “We think the bill has great intentions, but it's tough to work outside of a tipped wage industry and understand it.”

The timing is also wrong as the restaurant industry tries to remain afloat during the pandemic, he said.

“It's not a time for a social experiment, and that's what this feels like,” Moore said.

A petition against the bill is circulating on the Facebook page, Moore said, and members are hoping they get the opportunity to help educate legislators about their perspective. “We need to explain how it works,” he said. “Right now we're in an educational phase and letting everyone know what is going on.”

So far, more than 400 people have signed the petition that is available on change.org – Help Delaware Restaurant Workers: No 2 HB94.

Speaker of the House Rep. Pete Schwartzkopf, D-Rehoboth, said he has received dozens of emails from servers who are against the latest legislation that would increase the hourly rate for tipped workers from $2.23 an hour to about $6 an hour, and higher if the minimum wage increases. “It's not the first time we've seen this,” said Schwartzkopf of the bill that has no Sussex or Kent county sponsors.

“All this does is increase the cost to a restaurant ... in a pandemic, in one of the hardest-hit industries we've had,” he said.

Over the past few weeks, Sen. Ernie Lopez, R-Lewes, said every time he goes out to eat, servers have stopped him to talk about the bill.

“They tell me they are concerned because no one has taken the time to communicate with them about how the bill will benefit them,” he said. “As people take the time to look at the language, this just doesn't add up. And it doesn't add up to benefit the people who it says it's going to help.”

And as restaurants continue to operate at only 50 percent occupancy coming out of a catastrophic economic crisis, he said, now is not a good time to legislate changes that would be detrimental to the industry.

“I don't support the legislation,” Lopez said. “If it passes, I think it's going to have a negative effect on coastal Sussex County and our restaurant industry, and our employees who have already suffered a great deal.”

As a matter of policy, Schwartzkopf said everyone is guaranteed a minimum wage, including tipped workers when their tips don't bring their wages to the minimum wage amount.

“We should not be guaranteeing anybody anything above minimum wage,” he said.

Steve Montgomery, owner of the Starboard in Dewey Beach, said tipped servers have always been guaranteed minimum wage when their tips fail to bring their hourly rate to the minimum wage rate.

“I think this is a bill that has unintended consequences,” he said. “The few legislators behind it think they are helping servers, but in reality it not only hurts servers, it hurts business, too.”

Most servers in the beach area make well over the minimum wage – at least 20 percent in tips, Montgomery said.

“Servers and bartenders across the country prefer to make tips over a salary or higher wage,” he said. “The minute the perception is that they are being paid much more, the likelihood is that people tip less ... in reality, tipped employees do make the most money in most cases.”

Adding more stress to the struggling restaurant industry is the minimum wage battle raging in Washington, D.C., that would increase the federal minimum wage to $15. Delaware law follows the federal minimum wage mandate, meaning Delaware's minimum wage would also be $15.

Under HB 94, the hourly rate for servers must be no less than 65 percent of the minimum wage, so if the bill passes and Delaware's minimum wage rises to $15, servers would be paid $9.75 an hour.

“If you move them up to $6, $8 or $15, you're just cutting into how people pay them in the first place, which is tipping, and that's what they prefer,” Montgomery said.