YOUNGSTOWN, Ohio (WKBN) – Everyone wants to make more money, and in most cases, business owners want to keep their employees happy. But the issue of minimum wage, especially when it comes to tipped workers, is a nuanced issue that is hard to hammer out.
A ballot measure that will impact restaurant workers and owners is being fast-tracked in Columbus.
The Ohio Ballot Board has approved the measure for signature gathering and voters could see the issue on the ballot as soon as November 2024.
The proposed amendment to the Ohio Constitution titled “Raise the Wage of Ohio” would do many things. Specifically, it would fast-track increases to the state’s minimum wage to $15 per hour (nearly $5 more than the state’s current minimum wage of $10.10 per hour) and it would eliminate the tipped wage over time.
Eliminating the tipped wage is something of a double-edged sword for wait staff and could be crippling for restaurant owners, according to the Ohio Restaurant Association.
The ballot measure would increase the minimum wage faster to $12.75 beginning Jan. 1, 2025, and then to $15 an hour by Jan. 1, 2026. After that, the increase would continue at the higher rate.
Right now, tipped employees can be paid no less than half the minimum wage. If the ballot measure passes, employers would only be allowed to pay $4 less than the minimum wage beginning Jan. 1, 2025, and $3 less the following year and so on until tipped employees receive the full minimum wage as their base pay beginning Jan. 1, 2029.
The measure needs 414,000 signatures to put the issue before voters.
“The Ohio Restaurant Association does not support the ballot initiative. The base majority of our members say the marketplace is driving higher wages effectively in Ohio, especially in restaurants and hospitality businesses, and the tipped wage is critical to servers who can earn significant income well above the minimum wage.”Ohio Restaurant Association
According to research in 2022 by the National Restaurant Association, waiters and waitresses at full-service restaurants earn a median of $27 per hour. This median is based on hourly tips of $20 and median hourly employer-paid wages of $7.
“The elimination of the tipped wage would put restaurants’ reliance on tipped employees at risk, potentially eliminating opportunities that Ohio servers so value,” the ORA wrote.
Brian Palumbo is the owner of Selah Restaurant in Struthers. He says he is against the ballot measure.
“This is a boat that I would not want to get on. I don’t think the service industry would be very happy with the results of it. Considering that the pandemic has pushed what we have to pay our employees already way up, we are already well above minimum with all of our employees,” he said.
Palumbo says with the state the economy is in, something like this is not just going to affect the workers, it will impact customers, too.
“I think with inflation and everything, it’s just going to be a hardship not only on the owners of businesses but also on the customers themselves because now they don’t have a choice if they have good service or bad service to go 15 or 20 percent. If I knew as a consumer that you were making more money hourly, then I might not tip at all. I might think it is already included,” Palumbo said.
Palumbo questions the data behind the ballot measure and says that underreporting of wages may come into play, adding that the service industry has bigger problems than wages, and he wants a little more science on the issue.
“I think this is a very layered and very detailed and very deep conversation that needs to happen, but I don’t think a bill passing is the way to go right yet. I think there is not enough data to back it up,” he said.
He also believes the service industry would take a big hit when it comes to getting and keeping employees, pointing to when New York tried the idea for a while.
“The restaurants that did it had so much pushback. They also had trouble getting good staff. The staff that’s there that’s used to this way of working are seasoned. I don’t think they want to stay in the industry if they were automatically going to get a pay cut, which is going to be what this would equate to,” Palumbo said. “I don’t think it’s a good policy. I don’t think it’s a good thing to do. We’ve always had good success here at this restaurant with the current policies and procedures.”
The ballot initiative also eliminates the youth wage and repeals a current provision that allows the state to issue licenses to employers that allow them to pay below minimum wage to some people with mental or physical disabilities.
Shirley Bowald, manager of the Columbiana County Board of Developmental Disabilities, said that most, if not all, employers that hire those with mental and physical disabilities are paying the prevailing wage and have been for some time.
“This would not affect most places of employment, which are paying those with disabilities whatever they would pay non-disabled peers. There used to be ‘enclaves’ or places within a business that could fall under the 14(c) rules (14(c) is the certificate that they used to issue to businesses who applied to pay workers with disabilities a sub-minimum wage. The 14(c) certificate is also what workshops who pay clients sub-minimum wage hold),” Bowald said. “These enclaves created sort of a ‘business within a business’ that would have separate supervision for people with disabilities within that business, and they would only perform certain duties. There may still be some enclaves around, but I don’t think there are any in Mahoning or Columbiana County.”
Bowald is a member of the Association of People Supporting Employment First and supported a 2021 bill to change Ohio law to nullify the use of the 14(c) certificates, but it stalled in committee.
Ohio has more than 23,000 eating and drinking locations with roughly 520,000 restaurant and food service employees, according to the ORA.