Tipped workers at odds over St. Paul's minimum wage

It was Monday morning, and the bar at the Eagle Street Grille in downtown St. Paul was packed. Servers, bartenders and restaurant owners, most clad in matching black-and-white T-shirts, had gathered for beers and Bloody Marys before marching to City Hall with a bullhorn, a banner and lots of handmade posters.

In St. Paul, the debate over raising the minimum wage has turned restaurants workers into activists.

After a resounding defeat in Minneapolis last year, backers of exempting tipped workers from a citywide minimum wage ordinance have spent the last several months making their case across the river. They say that without a "tip credit" that allows employers to pay a lower base wage and factor tips into total wages, restaurants will be forced to raise prices, employ fewer people, switch from table service to counter service — or risk going out of business.

Although City Council members say they're waiting to make decisions about what the minimum wage ordinance will include, Mayor Melvin Carter has said he supports a $15 minimum wage for all workers.

"I feel like we're being ignored," said Jeffrey Crandall, a bartender at Eagle Street Grille and one of about 100 people who marched to City Hall Monday afternoon to demonstrate in favor of a tip credit. Though council members seem receptive, Crandall said, "they're going to have to have the political cover to actually support us."

Meanwhile, there's plenty of opposition from other tipped workers. As in Minneapolis last year, the debate in St. Paul over whether tips should count as wages has dominated the minimum wage discussion, and split the restaurant industry.

"I would say that we probably heard first and most from folks who are for or against a tip credit or a tip penalty, more than any other singular issue in this conversation," said St. Paul City Council President Amy Brendmoen.

Carter waited until after two dueling demonstrations outside City Hall — one for a tip adjustment, and one against it — had ended before releasing a statement.

"No one working full-time should have to live in poverty and this is why increasing St. Paul's minimum wage to $15 an hour has been one of my administration's top priorities during my first year in office," the statement said. "I encourage St. Paul's business owners, workers and residents to continue to engage with the Mayor's office and the St. Paul City Council as we enter the final stages of drafting and passing a citywide minimum wage ordinance before the end of the year."

If the City Council exempts tipped workers in the minimum wage ordinance — which is expected to raise the minimum wage to $15 an hour — they would still be paid the state minimum wage, which is $9.65 or $7.87, depending on business size. If that hourly wage plus tips does not equal $15 an hour during a shift, employers would be required to make up the difference.

Opponents say it won't work out that way.

Around 10:30 a.m. Monday, nine servers and baristas gathered outside City Hall, armed with a box of more than 300 petitions from tipped workers in St. Paul who want the higher minimum wage. Otherwise, they said, those workers will be stuck with unpredictable incomes that rely on tips — a situation that can lead to sexual harassment and wage theft.

"The tip penalty is notoriously hard to enforce in all the states that have it," said Wyatt Feten, who works at Finnish Bistro in St. Paul's St. Anthony Park neighborhood. "A tip penalty would leave all tipped workers behind."

Minneapolis passed its minimum wage ordinance in June 2017, and it is phasing in a $15 wage with adjustments for inflation between 2022 and 2024, depending on employer size. Since July 1, large businesses — those with 100 or more employees — have been required to pay $11.25 an hour, and small businesses have been required to pay $10.25 an hour.

Michaelann Gillis, a server at Smack Shack in Minneapolis, was a vocal advocate for exempting tipped workers in Minneapolis last year. In the time since, she said, she's watched her workplace change: There are fewer servers working the floor at a given time, prices have gone up and work on an outdoor patio has slowed.

"It's something that I talk about with our management all the time," she said Monday morning as she stood in a corner at Eagle Street Grille, drink in hand.

Though St. Paul's minimum wage ordinance wouldn't affect Gillis directly, she cares what happens there. If St. Paul exempts tipped workers, she said, then maybe Minneapolis would rethink its own policy.

Last month, the Citizens League released a report on St. Paul's minimum wage, the result of discussions by a 21-member committee of workers, employers and local business leaders. The committee offered three scenarios for St. Paul to reach the minimum wage, two of which extended a $15 minimum wage to tipped workers.

Matt Gray, a server at W.A. Frost in St. Paul who served on the study committee, said he remains hopeful that St. Paul leaders will consider an exemption for workers like him. Officials seem to be taking a more cautious approach to the wage question than their counterparts in Minneapolis, he said. And even though workers are split over tips, he said, there's common ground.

"I think that we have the same goals," he said. "Both sides want workers to have livable incomes."

Emma Nelson • 612-673-4509