Portland, Maine Accidentally Gives Tipped Workers a Raise

July 21, 2015

Language matters, especially when it comes to legislation. Recently, we had proof of this when the Affordable Care Act nearly deflated thanks to an alternate interpretation of the phrase “established by the state.” Now, city officials in Portland, Maine, find themselves in a similar bind: confusion over the language in a recent bill to raise the city’s minimum wage to $10.10 an hour led city council to nearly double tipped workers’ wages, from $3.75 to $6.35 an hour, as of January 1. The accidental raise was met with dismay from restaurant owners and delight from labor organizers. Both dismay and delight, however, might be short-lived.

portland maine

(Photo Credit: Alexius Horatius via Wikimedia Commons)

“That’s never been part of the discussions we’ve had,” Mayor Michael Brennan told The Portland Press Herald. “It was very clear that we weren’t trying to move toward increasing the financial impact on restaurants.”

Do You Know What You're Worth?

The error seems to have occurred thanks to a misunderstanding of state law regarding tip credits. Maine allows employers to deduct $3.75 – half the state’s minimum wage – from the amount paid tipped workers, with the provision that they’ll have to make up difference if the worker doesn’t earn minimum wage. When Portland’s city council voted to raise the minimum wage for the city, they unknowingly also gave tipped workers a raise. Restaurant owners would have to make up the gap between employees’ earnings and the new, citywide minimum wage, with only the $3.75 credit to offset the amount.

Mayor Brennan told The Portland Press Herald that city council might amend the ordinance before it goes into effect in 2016, although he didn’t mention specific measures. One possibility would be to create two minimum wages: one for tipped workers, and one for non-.

Labor leaders are rallying restaurant workers to petition the council to leave the mistake as is.

“I think Mayor Brennan and the council should be proud of the mistake that they made,” says Kennard Ray, the national policy director for Restaurant Opportunities Centers United, in an interview with BloombergPolitics.

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