A Tip for Missouri Employers: Pay Workers What Voters Say You Owe Them

by Mike Hall, Mar 19, 2007

Here’s a tip for Missouri restaurant owners. The state’s new minimum wage law means you and other employers with workers who earn tips also owe them a raise, Gov. Matt Blunt ruled last week.

In November, voters in six states approved a boost in their state’s minimum wage. Missouri voters were among them, raising the state’s minimum wage from the decade-old federal rate of $5.15 an hour to $6.50 an hour starting Jan. 1. Under Missouri state law, employers of tipped workers are allowed to pay them just 50 percent of the minimum wage, with the assumption the workers make up the difference with tips.

Prior to the passage of the Missouri ballot initiative, workers covered by the federal minimum wage law were exempt from the Missouri state minimum wage law. As such, nearly all tipped workers in Missouri were entitled to a cash wage of only $2.13 per hour, the cash wage for tipped workers set at the federal level.

Under the new state law, which eliminated the exemption for workers covered by the federal law,  the cash wage for tipped workers should have jumped to $3.25 an hour (50 percent of $6.50, the new state minimum wage). But for reasons that remain unclear, the state’s Department of Labor and Industrial Relations advised employers that the $2.13 an hour was all they owed their workers, as long as their tips pushed the hourly rate to $6.50.  That advice was posted on the department’s website.

That move rankled the tens of thousands of tipped workers who were expecting a little extra in their paychecks—so much so, that tipped workers and their allies who had fought to pass the wage hike initiative kicked off another campaign: Save Our Tips.

Save Our Tips, along with the legal opinion offered by several law professors at Saint Louis University School of Law and Washington University in St. Louis, as well as the Brennan Center for Justice at New York University School of Law, convinced the governor that the Labor Department was wrong, and last week Blunt overruled the agency.

Missourians voted to increase the minimum wage and I have directed the Department of Labor and Industrial Relations to immediately clarify that the base wage is not exempt from this mandate.

It might not be over, though. According to the law professors’ analysis, the advice of the Labor Department exposed employers to “significant liability for back pay, liquidated damages, attorneys’ fees and court costs” if workers sue.

As expected, employers are whining. In what must be considered a bizarre statement by anyone who has ever waited tables, an executive at the Missouri Restaurant Association claimed wait staff workers earn up to $30 an hour with their tips. Maybe at a top flight Kansas City steak house, but certainly not a Cape Girardeau Denny’s or a Neosho Waffle House.

BTW, Senate Republicans who insist on tying a federal minimum wage raise to billions of dollars in tax breaks for business haven’t budged from their roadblock tactics. We’ll keep you posted.   

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