Wage bill serves up outrage.

Byline: Jeff Wright The Register-Guard

Waitress Taresa Havens doesn't typically follow the maneuverings of Congress all that closely, but a bill that could affect how much she brings home in tips and wages has captured her attention.

"I just heard about it last night," said Havens, who works at Buddy's Diner on Coburg Road in Eugene. "They want to lower the minimum wage by $3. They're taking money out of my pocket."

It's not quite that simple, but Havens is right that Congress is debating a federal minimum wage law that could deal a pay cut of $3 or more per hour to thousands of waiters, bellhops and hairdressers in Oregon and six other states where workers currently are paid their state's full minimum wage and receive tips from customers on top of that.

Other than in these seven states, workers who receive tips are paid below the minimum wage and get to keep their tips. The proposed federal law - for which a key Senate vote looms Friday - would essentially apply those standards to Oregon. It would impose a lower minimum wage for workers who receive tips than for those who don't receive tips.

MINIMUM WAGE PLUS TIPS Seven states have a minimum wage that applies to all workers, including those who receive tips on top of wages. Alaska California Minnesota Montana Nevada Oregon Washington

The Republican-sponsored bill would increase the federal minimum wage from $5.15 to $7.25 per hour, phased in over three years. Even then, the federal minimum would be less than Oregon's minimum of $7.50, which is adjusted annually for inflation and is the second highest state minimum wage in the nation.

Critics of the proposed federal law say that language in it would cut the minimum wage of tip receivers, dealing them what would amount to a pay reduction of $3 an hour or more.

Supporters of the bill say it's not clear that the language would do that.

Instead, these supporters say, the bill would simply exempt tip earners from getting new increases in the minimum wage. In that scenario, if Oregon's minimum wage would increase, tip earners would not be paid the increase so long as their tips made up the difference.

The federal minimum wage has not increased since 1997. The new wage bill has been approved by the House and awaits action in the Senate.

In some furious horse-trading, Republican congressional leaders have pegged the proposed minimum wage to cuts in inheritance taxes on multimillion-dollar estates, and to funding to pay for abandoned coal mine cleanup projects.

Supporters of the bill reacted sharply to criticism that the bill would actually cut the current pay of minimum-wage recipients.

"Nobody wants to pay anybody less than what they're making today," said Bill Perry, director of government relations for the Oregon Restaurant Association, which favors the federal bill. "There wouldn't be any reduction (in total compensation) for any employee, period."

But critics say the federal law would supersede state minimum wage laws for tipped workers. Under that scenario, tipped workers could conceivably be entitled to a minimum wage of as low as $2.13 an hour, instead of the current $7.50 in Oregon, critics said.

For years in Oregon, the restaurant industry and other industries that hire low-wage workers have tried to get the Legislature to exempt their workers from the state minimum wage. But they've always failed. Instead, Oregon has steadily raised its minimum wage for all workers.

The federal bill "thwarts the will of Oregon voters" who in 2002 overwhelmingly approved a measure setting a strong minimum wage with annual cost-of-living adjustments, said Mike Leachman, a policy analyst with the Oregon Center for Public Policy, a Silverton-based think tank that advocates for low-income people. Under the proposed federal law, "tipped workers would not get to have their base (minimum) wage keep up with the cost of living."

States have had the power to set their own minimum wages without federal interference since the Depression era, Leachman said. "That makes this a pretty radical departure - the first time Congress has ever limited how states can raise their minimum wages."

Jordan Witko, a waiter and bartender at Steelhead Brewery in Eugene, said he's worked in other states on the East Coast that allow employers to pay their tipped workers at below the state minimum wage. He figures the new federal law would hurt him here in Oregon.

"The rate of tippers is just so different - 18 percent is the standard out East, where here it's 15 percent or less," he said. "You need the (higher) minimum wage here to make up the difference."

Justin Van de Graaf, another Steelhead waiter, said he's come to depend on receiving tips on top of his base wage.

"I've got a little girl who's 2, and her mom takes care of her while I work here," he says. A change in the wage law "would be a burden, especially when everything else is going up."

Back at Buddy's Diner, Havens said the proposed law makes her mad.

"So many people in this profession are already borderline poor, barely making it as it is," she said. "I get paid two times a month. The tips are what keep us going, help us buy the groceries and the gas in between paychecks."