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Twenty states are raising their minimum wages today.
Employees who work for tips are often paid a much lower, tipped minimum wage. The federal government requires that this lower wage plus the tips received equal at least the federal minimum wage of $7.25.
But some states require employers to pay their tipped workers the full state minimum wage or a wage above the federal tipped minimum wage of $2.13.
In an effort to comply and to maintain profits, some restaurant owners are doing away with tips all together. The idea is that part of the sales of food will go into a higher hourly wages for the servers.
Packhouse Meats in Newport, Kentucky, opened a year ago — it is a no-tipping establishment.
"Really the concept comes back to our servers," Mark Schultz, co-owner of Packhouse Meats, tells Here & Now's Peter O'Dowd. " We wanted to protect them as far as people coming and not tipping well and from people who don't tip period."
Packhouse Meats server Jasmin Duaso also joins O'Dowd to discuss what she feels are the benefits of not having to work for tips.
"When it's slow days, we get paid $10 an hour, rather than getting paid a couple dollars an hour and waiting for tips," Duaso said. "I actually get a decent paycheck, and as far as our sales go, if we make more than our sales, we get something like a commission."
States Raising Minimum Wage on 01/01/2015
- Mark Schultz, co-owner of Packhouse Meats.
- Jasmin Duaso, server at Packhouse Meats.
This segment aired on January 1, 2015.