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It’s Time to End the Subminimum Wage for Tipped Workers

This week, workers filed discrimination charges against Darden Restaurants, one of the largest restaurant companies in the US. Forcing workers to rely on tips violates the Civil Rights Act, advocates say. They’re calling for a single minimum wage for tipped and non-tipped workers alike.

With a twenty-four-foot wooden statue of "Elena the Essential Worker," activists from One Fair Wage hold a demonstration in Times Square to demand a fair wage for tipped workers during coronavirus and beyond, on August 31, 2020 in New York City. (Spencer Platt / Getty Images)

On Tuesday, September 29, Jeffrey Jean-Louis, who works at the Capital Grille in New York City, filed a complaint with the Equal Employment Opportunity Commission (EEOC) against his employer’s parent company, Darden Restaurants, Inc. Darden, which includes chains such as Olive Garden, Red Lobster, LongHorn Steakhouse, and the Capital Grille, is one of the largest restaurant companies in the United States, with $8.5 billion in revenue. In the complaint, Jean-Louis alleges facing racial discrimination.

“There’s a system in place where they’re trying to put a certain type of server up front, that being a white male,” says Jean-Louis. “All the white gentlemen get work, whether they can handle it or not.”

On the same day, Pamela M. Araiza, who works at the Capital Grille in Washington, DC, filed her own EEOC complaint against Darden, alleging both racial and gender discrimination. In her complaint, Araiza says that she was “consistently assigned to sections of the restaurant known to generate less in tips, which management referred to as ‘Section 8’ or ‘my low-income world.’”

The complaints are part of a litigation strategy brought by One Fair Wage, a nonprofit that advocates for an end to the subminimum wage. The same day that Jean-Louis and Araiza filed their complaints, One Fair Wage filed a federal EEOC charge, arguing that Darden’s practice of paying tipped workers a subminimum wage leads them to experience more sexual harassment than non-tipped workers, and causes employees of color to make less money than their white coworkers.

Drawing on a growing body of research on tipping and discrimination, One Fair Wage’s complaint argues that Darden’s practices “cause disparate impact against Darden employees based on race and sex in violation of Title VII of the Civil Rights Act of 1964.”

“Workers of color are segregated into lower-tipping restaurants, but even when they get to the same restaurant, same shift, and same section, they’re tipped less because of implicit bias,” says Saru Jayaraman, president of One Fair Wage. As for the connection between tipping and sexual harassment, Jayaraman describes the evidence as “irrefutable.” When women live off tips, she says, “there’s a power dynamic that results not just in customers harassing women, but managers telling women to dress sexier, show more cleavage, in order to make more money in tips, and that makes them vulnerable to manager and coworker harassment because they have to subject themselves to objectification every day.”

“This litigation is saying that it’s not about bad managers, or racist companies, it is a policy and a system that inherently violates equal protection,” says Jayaraman.

Previous research conducted by Restaurant Opportunities Center (ROC) United, a nonprofit workers’ center, finds that “women restaurant workers living off tips in states where the sub-minimum wage for tipped workers is $2.13 per hour are twice as likely to experience sexual harassment as women in states that pay the same minimum wage to all workers.” Further, the report shows “all workers in states with a $2.13 sub-minimum wage, including men and non-tipped workers, reported higher rates of sexual harassment.”

Once a complaint is filed, the EEOC investigates. If the agency finds the One Fair Wage complaint has merit, it will issue the organization and the servers who filed complaints a right-to-sue letter, enabling them to bring their cases to court.

Jayaraman expects the complaint will be found to have merit, but One Fair Wage isn’t limiting itself to a legal strategy. In addition to lobbying for an end to the subminimum wage at the legislative level, the organization organized a one-day walkout in several cities, including Chicago, New York, and Washington, DC, on September 30, the day after filing the EEOC charges. Jayaraman estimates forty to fifty workers struck at each location. The walkouts, which targeted Darden restaurants, featured speeches from workers, along with “Elena the Essential Worker,” a giant strike mascot that Jayaraman describes as a “modern-day Rosie the Riveter.”

“It’s within the realm of possibility for Darden to do the right thing here,” says Jayaraman, who hopes Darden can be pressured to voluntarily change their wage policy. She notes that the company “fought sick leave for so long and when the pandemic started, they announced they’d implement it.” Should Darden change its position on subminimum wage, it could pave the way for other chain restaurant companies to do the same.

The Status Quo Can’t Survive

There’s no better time than now to end the two-tiered minimum wage system. As the coronavirus pandemic rages on, the estimated ten million or more people who work in US restaurants are facing a raw deal. Servers are now taking on the duties of health and safety marshals — monitoring customers’ mask usage, their social distancing, and in some cases, their temperatures — on top of their regular duties. And this is at a time when tips have declined drastically as fewer customers dine at restaurants.

Restaurant workers are faced with an impossible choice: risk their health for a diminished income and greater work duties, or lose their job and face hunger, eviction, and poverty. According to Jayaraman, despite the hardship of unemployment, thousands of workers are refusing to return to work. (Millions of restaurant workers who apply for unemployment are denied the benefit, often being told that this is because their subminimum wage is too low for them to qualify.)

“I have never, in my twenty years of organizing service workers, experienced a moment like this. Thousands of workers across the country are saying ‘We’re not going to do it, we’re not going to go back and risk our lives without one fair wage,’” say Jayaraman. She says One Fair Wage is increasingly hearing from employers across the country that they can’t get their workers to return without a full minimum wage.

“With the pandemic, they have our lives in their hands,” says Jean-Louis of his employer, who he says hasn’t communicated with all its workers about the limited reopening of indoor dining that began this week in New York City. “They play with your shifts,” he adds, speaking to the racial discrimination that led him to file the EEOC claim. “They know they’re playing with your life.”

The pandemic isn’t the only thing that has mobilized restaurant workers — Jayaraman and several servers spoke of the murder of George Floyd this summer and the explosive protests that followed Floyd’s death as a wake-up call that inspired them to push for an end to discriminatory practices in the restaurant industry.

Damani, a server who has worked in restaurants for over twenty years, likens the industry’s racial segregation to Jim Crow.

“How you pass the test of whether you’re lighter or darker than a brown paper bag determines where you work in the restaurant. It’s as simple as that,” he says, adding that in his decades in restaurants, he has “never worked with another man of color, not my color.”

Some progress has already been made toward ending the subminimum wage. So far, seven states have legislated an end to the practice. While there’s movement in other locales, it is plagued by carve-outs that exclude certain tipped workers (in New York, Governor Andrew Cuomo’s order excludes restaurant workers, the largest group of tipped workers in the state). In Washington, DC, Initiative 77, which would have gradually ended the two-tier minimum wage system, passed as a ballot measure in 2018 only to be overturned by the city council, with the city’s Democratic mayor, Muriel Bowser, signing the repeal legislation.

Despite these obstacles, Jayaraman says an increasing number of independent restaurant owners are switching sides on the issue, realizing that the status quo can’t survive.

As for the argument that restaurants — an imperiled venture in the best of times — can’t afford increased labor costs as they struggle to survive the economic crisis that has accompanied the pandemic, Jayaraman emphasizes while losing a restaurant is hard, losing the ability to feed one’s family or pay one’s rent is even harder.

Total economic devastation “is what ten million restaurant workers are going through right now, and that’s why they’re rising up,” she says. “It’s time for legislators and big companies like Darden to follow suit.”