(NEXSTAR) – Those working in the food service industry are, in most cases, paid a lower wage than the rest of us. It’s largely because they are expected to receive tips.
But, as many have argued, paying a server the federal minimum wage for a tipped employee, paired with the tips they receive, sometimes isn’t enough to reach the standard minimum wage of $7.25. This is pushing some restaurants to transition to a tipless style of business.
Current federal regulations require tipped employees — those who receive more than $30 in tips each month — be paid a minimum wage of $2.13. That server must then average $5.12 in tips each hour, meaning they would make the federal minimum wage of $7.25. If a server doesn’t earn enough tips in a shift to make $7.25 an hour, federal law says the employer must pay them the rest to reach that rate.
While this may differ for some states, others do follow that federal minimum requirement, including Indiana, where one business owner decided to stop accepting tips.
In 2021, Kurtis Cummings, the founder and president of Switchyard Brewing Company, decided to eliminate tipping at his Bloomington, Indiana, craft brewery. Instead, Switchyard employees are now paid at least $16.25 an hour.
“It’s the employer’s responsibility to pay their employees, not the customers,” Cummings explained to Nexstar. He also noted how factors such as the server’s gender or age, the weather, or...
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