Question 5 Has little Support Locally

Question 5 on the Nov. 5 election ballot proposes a law that would gradually increase the minimum hourly wage an employer must pay a tipped worker over the next five years. 

A yes vote would increase the hourly wage from $6.75 to the state minimum wage of $15. The initiative would also amend a section of the current law allowing the employer to require tip-based service employees to participate in a tip pool to distribute tips to employees that are not wait staff. The petition is sponsored by the organization One Fair Wage, a national organization of restaurant and service workers. 

According to its website, One Fair Wage seeks to end all subminimum wages in the United States and increase the sustainability of wages and working conditions in the service sector. One Fair Wage’s position is that all employees receive the full minimum wage with fair, non-discriminatory tips on top, which the group says will lift millions of tipped and subminimum wage workers nationally out of poverty.  

A no vote would make no change in the law governing tip pooling or the minimum wage for tipped workers, according to the state’s Information for Voters bulletin.    

“We’re both hard no’s against it,” said Jennifer Ramler, who owns Cape Sea Grille restaurant in Harwich Port with her husband, Doug Ramler. 

She said a lot of people do not understand how tip employees work. If workers do not meet the minimum hourly wage through tips, the restaurant has to make up the difference, she said. There are also other costs associated with the payroll. Additional assessments would be necessary to match social security, paid medical family leave, and unemployment insurance, she said.  

“They don’t see that,” Ramler said. “I’ve done the math, it will add $90,000 annually.”

Ramler said it hurts seasonal restaurants more because of the unemployment insurance required to cover seasonal employees. Those costs have to be rolled into prices, she said, but prices are already at a peak and no one wants to make increases.

“I’m a big no for that one,” said Ellen Pagliaro, a server at Pate’s and Chatham Cut in Chatham. “Everyone who has been doing this for a long time is against it.”

Pagliaro said she already pays 25 percent of her tips to “front-of-house” employees. Ten percent of net sales on food and liquor goes to the bartenders, up to 10 percent goes to bussers and 5 percent goes to expediters, she said.

“It sounds like the owners would have control of the tipping pool and who it would be distributed to,” Pagliaro said. “If you own a restaurant you need to pay the staff and team without me subsidizing it.” 

She said there is a very large kitchen staff at Pate’s and server tips should not be used to pay those employees. Diners coming into restaurants will think with servers making the minimum wage, they will not have to tip as much, and that will have a negative financial impact, she said.  

 According to the majority report of the Special Joint Committee on Initiative Petitions, made up of four state senators and four state representatives, the practice of requiring the pooling of tips from “front-of-house” staff with “back-of-house” staff is currently outlawed in Massachusetts. 

 According to Grace McGovern, One Fair Wage’s lead organizer in Massachusetts, tip pooling already occurs in Massachusetts. Currently, tipped workers share tips among servers, bartenders, bussers, barbacks, expediters and other dining room staff. 

“This initiative would align [Massachusetts] with federal law, which allows all other states to give tipped workers the option to extend the pool to non-management kitchen staff, only when dining room staff receive a full minimum wage with tips on top,” McGovern wrote in an email.

 The system established by federal law increases equity and teamwork between all non-management workers in a restaurant, she said. Even with tip sharing among front- and back-of-house workers, workers in seven states that require a full minimum wage with tips on top still earn more in wages and tips than workers in Massachusetts, according to McGovern.  

 “These seven states have higher restaurant sales per capita, higher overall restaurant industry job growth, higher small business restaurant growth rates, and the exact same menu prices,” she said. “All of this has been documented in the recent University of Massachusetts Amherst report on Question 5's impact on the [Massachusetts] economy.”

 Currently, front-of-house employees can tip out to back-of-house staff at their discretion, with an example given that a tip could be shared with back-of-house staff for helping the employee out, but the front-of-house staff does not want to lose this important component of their work, according to the Joint Committee on Initiative Petitions report.

“Tip pooling with non-service employees will not benefit business owners,” Doug Bacon of the Committee to Protect Tips, which opposes the initiative petition, wrote in an email. “If Question 5 passes, some owners may choose to include back-of-the-house employees in a tip pool. The dramatic increase in labor costs for servers and bartenders will force all owners to make adjustments in staffing, technology, and service models. Over time, sharing tips with non-service employees will likely lower hourly wages for back-of-the-house staff.” 

If Question 5 passes, it will force all full-service restaurants to make adjustments. The dramatically increased hourly wage paid without the tip credit will result in job losses and menu prices will increase, Bacon said.

“Some owners will change to guests placing orders on their phones after scanning a QR code at the table; others may require guests to place their order with a single staff person positioned at a register and then have customers pick up their order at the counter, with no table service offered,” said Bacon, president of the Red Paint Hospitality Group with several businesses in the Boston area.

Affordable restaurants will be especially hard hit, he added, fine dining less so, and fast food businesses will be completely unaffected. 

Gov. Maura Healy has come out against Question 5. In a statement made on WGBH Boston Public Radio Live, she said she waited tables on and off between the ages of 13 and 24, and she has talked to a lot of wait staff, bartenders and restaurant owners.   

 “Honestly, I think this is a well-intentioned effort brought by out-of-state interests,” Healy said. “Here in Massachusetts, I think we are doing it right… As Attorney General, I fought hard for workplace protections, for fair wages, all that. But I think this actually harms that effort and that’s why I feel strongly about this particular question.” 

 The Cape Cod Chamber of Commerce also opposes Question 5.

“While well-intentioned, Question 5 has the potential more than any other ballot question this election season, to directly impact Cape Cod’s regional economy, workers and visitors,” said Executive Director Paul Niedzwiecki. “The Cape Cod chamber opposes this question due to the risk that it could function as a cap on the earning potential of restaurant workers, particularly those workers in seasonal economies, and could serve to squeeze out small and mid-sized restaurateurs who are already barely surviving on the margins of a seasonal economy.”

The Special Joint Committee on Initiative Petitions concluded there is not enough evidence on the overall impact that the question would have on the restaurant industry and restaurant workforce in the commonwealth. Questions remain on the viability of restaurants and other tipped wage industries to absorb the costs of the more than 100 percent increase from the current minimum tipped wage an employer is responsible for paying, the committee said.