House OKs bill setting lower wage for some tipped workers

A year after lawmakers hiked Minnesota's minimum wage for the first time in a decade, the Republican-controlled House voted Monday to curb those increases for some tipped workers.

The House passed a bill 78 to 55 late Monday night that would allow employers to pay staff members the $8 hourly minimum wage if tips bring their pay above $12 an hour — even with the state's minimum wage set to increase up to $9.50 by 2016. Most Democrats voted against the bill.

Dozens of protesters gathered outside the House on Monday afternoon, singing and chanting, "Protect the wage!" with signs deriding Rep. Pat Garofalo's bill as a "tip penalty." Garofalo, a Farmington Republican, and others defended his bill as a necessary step to protect restaurants from increasing labor costs. Garofalo has noted it wouldn't bring tipped workers' wages down to the hourly level in some other states — as low as $2.33 hourly in neighboring Wisconsin.

"It recognizes the costs of employers," Garofalo said of his bill.

Most states have different floor wages for tipped workers, but the prospect of factoring tips into wages has been a political hot potato in Minnesota for years. The measure faces dim prospects in the Senate and governor's office, where the Democrats in control say they have no appetite to discuss treating tipped workers any differently.

Gov. Mark Dayton said the minimum wage law enacted last year was one of the best things the state has done in recent years to help those earning the least.

"It's good family policy and I don't see any reason to tamper with it," Dayton said.

But Garofalo and others have said that minimum wage hike — enacted when Democrats controlled the House, Senate and governor's office — has saddled some businesses with extra costs they can't stomach without raising menu prices. Garofalo said he's just seeking to add to an existing exemption passed in that law; some resort workers are paid a lower wage under the 2014 law.

Freshman Republican Rep. Dave Baker told lawmakers about the restaurant he has run for 12 years in his hometown of Willmar. He said his employees are on board with the bill he voted for.

"If the owners can continue to reinvest, continue to keep their prices so folks can afford to come out, that will put more people in the seats,'' he said. "Our employees will win because of this bill."

Democrats said the economic doom and gloom Republicans predicted from last year's minimum wage increase never panned out. And they argued that Garofalo's bill unfairly punishes workers already paid among the lowest in the state.

"It says if you work hard, if you earn a good tip, we're actually going to take wages away from you," said Rep. Carly Melin, DFL-Hibbing. "That should not be the message that we're sending to hardworking Minnesotans."

House Democrats repeatedly tried and failed to tack on additional measures, such as creating a paid family and sick leave systems for employers and setting a higher minimum wage for Minnesota companies whose CEOs are paid more than $1 million annually. In nearly every case, Republican legislators headed off those amendments before they came to a vote.

Democrats did succeed in adding a provision that would require employers to inform potential hires of the new wage calculations.