Tip earner minimum wage increase stalls

A bill that would have increased the minimum wage for Nebraska workers who earn tips failed to advance from general file April 14.

LB494, introduced by Sen. Jeremy Nordquist of Omaha, would have increased the tip earner wage from the current $2.13 to $3 per hour in 2015. For each year thereafter, it would increase by the lesser of 95 cents or the amount necessary to equal 50 percent of the regular minimum wage.

Nordquist said the minimum wage for Nebraska’s 15,000 tip-earning workers has not increased since 1991. Although federal law requires that businesses compensate gratuity workers the difference between tip and minimum wage, he said, research shows that 84 percent of businesses do not comply with the law.

It is time for restaurants to stop relying on customers and taxpayers to provide a living wage for their employees, he said.

“Every worker is entitled to a level of base pay,” Nordquist said. “These are families that count on this.”

Lawmakers failed to adopt a Business and Labor Committee amendment on a 20-25 vote that instead would have increased the wage to $2.35 on Aug. 1, 2015, and $2.64 on Jan. 1, 2016.

Lincoln Sen. Matt Hansen supported the amendment and bill, saying Nebraskans overwhelmingly supported a ballot initiative in 2014 to raise the state minimum wage.

“We need to focus on and recognize that the people of Nebraska have been very clear on this issue,” Hansen said.

Gretna Sen. John Murante spoke in opposition to the bill. Tip earners receive the bulk of their pay from tips and can earn hundreds of dollars a night in gratuities, he said. The wage increase would be especially unfair to owners of smaller restaurants and those that sell less expensive meals, Murante said, because servers receive lower commissions at those venues.

Sen. Mike Groene of North Platte also spoke in opposition to the bill. Raising the wage would force restaurants in smaller communities to fire workers because their volume of customers is so low, he said.

“There’s an awful lot of small town restaurants that just can’t make it,” Groene said. “They are going to send those kids home.”

The bill failed to advance on a 18-27 vote. It is unlikely to be scheduled for further debate this session.