Recognize tips as part of wages.

Byline: GUEST VIEWPOINT By Michael McCallum For The Register-Guard

The U.S. Senate has rejected a bill (House Resolution 5970) that includes a provision long overdue and needed for the health of the state's largest private sector employer: restaurants, the small-business backbone of Oregon's economy.

The bill may be reconsidered in September. It deserves approval, because it would establish a `tip wage' that would help bring fairness to Oregon's restaurant employment picture.

A `tip wage' is an established wage for employees who receive more than minimum wage in tips. Like commissioned employees, the bulk of most tipped employees' wages comes from tips.

But the meaning of tip wage often gets lost in political rhetoric, and because of some who ignore stated fact, confusion reigns over wage fairness for tipped employees in Oregon.

There are major earning discrepancies between those working hard to provide excellent customer service in the front of the restaurant and those working to keep the operation running smoothly in the back of the house.

At $7.50 an hour, Oregon has one of the high- est minimum wages in the nation. Tipped employees earn minimum wage plus tips - a total of $17 to $20 per hour on average.

However, Oregon does not recognize those tips as wages. So when the minimum wage is increased without a tip wage, employers are forced to increase wages for the highest paid employees - servers - at the expense of back-of-the-house employees.

The concept of a tip wage is not new. Forty-three states already recognize tips as wages.

However, Oregonians today are scratching their heads on a complex issue that is misrepresented due to incorrect information. Some are blatantly declaring the tipped wage provision will cut the minimum wage for tipped workers in Oregon.

This is simply not true. HR 5970 explicitly states that a tipped employee must be paid `not less than an amount equal to the cash wage paid (under state minimum wage laws) on the date of enactment' of the bill. As Oregon's minimum wage increases, tipped employees will be guaranteed the base wage of $7.50 plus 100 percent of all tips they receive.

The U.S. Labor Department confirms this fact. The Department of Labor's Wage and Hour Division stated in an Aug. 2 letter to Senate Majority Leader Bill Frist that `If Section 402 of the act (`tipped wage fairness') were passed into law, (the department) would read Section 402 as protecting the current minimum wages of the tipped employees in the seven states. ...'

Unfortunately, a lack of tip wage is hurting the very workers it intends to help. Oregon's refusal to recognize tips as wages has a negative and unfair impact on back-of-the-house workers. While wages for tipped employees increase every year, veteran cooks who earn more than the minimum wage actually have seen their wages stall.

Restaurants are the cornerstones of local economies and tourism. A tip wage has been needed in this important industry since 1977.

Union misrepresentations and scare tactics won't change the facts: HR 5970 respects the wishes of Oregonians in enacting minimum wage law, and allows tip wage provisions that strengthen Oregon's restaurant industry.

Michael McCallum is president and CEO of the Oregon Restaurant Association.