Minimum Wage in Santa Fe County

In the United States, servers rely on tips for most of their pay.  They add these tips to the federal or municipal minimum wage for tipped employees. On average, entry level servers make about $12.00 per hour in tips.  So, using the federal minimum wage, that’s over $14.00 per hour.   If the employee does not make enough in tips to meet the non-tipped minimum wage, the employer makes up the difference.  Santa Fe County is considering raising the $2.13 base wage for tipped employees to $6.40.  The problem for employers is that an increase in the server wage makes it difficult to increase the pay to the back of house staff (kitchen and dishwashers) who don’t participate in tipping.  Employers have to make difficult decisions.  Do they cut staff?  Reduce hours? Raise menu prices?  Do you think an increase of tipped employee wage of over 200% is reasonable for Santa Fe County’s restaurants? Let us know your take on this topic.

Letter from NMRA to Santa Fe County Commissioners:

On behalf of the board of directors and members of the New Mexico Restaurant Association, I would like to thank you for reconsidering the 300% increase in server wages. Mandated wage hikes cause restaurant operators to make very difficult decisions that typically involve the elimination of jobs, reduction of staff hours and/or an increase in menu prices.  I represent many of the smaller independent restaurants in Santa Fe County. I have been receiving calls from distressed restaurant owners not knowing what to do about this unscheduled increase in payroll on top of high commodity prices. You are to be commended for recognizing a mistake was made and needs to be corrected before you implement your wage hike.

Rest assured, servers are some of the highest paid employees at a restaurant. Just this month a restaurant manager, a 40-year veteran, told me that one of his tipped employees had higher income in 2013 (both in total and on an hourly basis) than any of the restaurant managers or non-tipped employees, including him. This is not an uncommon occurrence. Servers average $11.40 per hour in New Mexico. As you know, it is not legal to pay employees less than minimum wage, even tipped employees must have their hourly income equal at least minimum or the employer must make up that wage.

The practice of tipping is clearly under fire in the United States.  Extremist believe it is a plot to underpay workers, despite the fact that tipped employees are some of the highest paid employees in the restaurant industry.  It’s really just a difference of what is considered acceptable. In the United States, servers rely on tips for most of their pay; In Europe and other countries, a service charge is added to a check and becomes a part of the taxable business income from which wages are paid. Santa Fe has enjoyed a healthy restaurant industry partially because they have not over-burdened restaurants with increased server wages on top of their living wage law.

Thank you for your consideration on behalf of all the restaurants doing business in Santa Fe County. I am not able to be at your meeting tomorrow but will remain available by phone if you have questions or comments.

At your service,

Carol Wight

New Mexico Restaurant Association

CEO

9201 Montgomery NE, Suite 602

Albuquerque, NM 87111