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  • Writer's pictureThe San Juan Daily Star

PDP bill would hike base salary of workers whose income comes mainly from tips

Rep. Orlando Aponte Rosario

By The Star Staff

Three Popular Democratic Party lawmakers filed House Bill 1133 on Tuesday, which would increase the base salary of individuals whose largest share of income comes from tips.

Reps. Orlando Aponte Rosario, Juan José Santiago Nieves and Domingo Torres García would amend the Puerto Rico Minimum Wage Law to increase, effective July 1, the base salary of workers subject to income from tips to 75% of the current state minimum wage.

HB 1133 also proposes to equate, as of July 1, 2023, the state minimum wage of workers subject to income from tips with the current state minimum wage.

“Undoubtedly, the approval of Act 47-2021, the Puerto Rico Minimum Wage Law, was a legislative recognition of the urgent need to guarantee access to a living wage for thousands of employees who, for a little more than 11 years, have subsisted on the minimum amount of $7.25 of wages per hour worked,” Aponte Rosario said. “However, the enactment of new salary guidelines for the service industry escaped legislative consideration. Faced with this reality, we are seeking justice for workers who earn very little per hour and their salary is actually the tips they may receive.”

Santiago Nieves added that “the concept of tips is one where the worker is at the [mercy] of what the consumer is interested in contributing, so we all agree that the payment of $2.13 per hour is terribly discriminatory and abusive.”

“In 1966, the Supreme Court of the United States enacted the concept of credit for tips, which allowed justifying the payment of a lower base salary that took into account that the remaining portion to reach the figure of the federal minimum wage would be compensated through the customer tips,” he noted.

The bill points out that just over 26 years ago, the federal government set $2.13 as the base salary for tipped service industry employees. Although living with that amount in salary is unimaginable, at present, the $2.13 has remained in force as the base salary for workers in service industries who receive tips. This unquestionably bears on the fact that tipped restaurant workers in the United States live in poverty at more than twice the rate of the rest of the workforce, with statistics that put them at 19.2% compared to 7.9%, the legislation says.

“Let’s see the following: in practice, and although federal law requires employers to make up the difference when tips are not enough to reach the minimum wage, the recurring breach of employers with such legal provision has remained a repeated complaint,” Aponte Rosario said. “For example, it stands out that a review conducted by the federal Department of Labor between the years 2010 and 2012, found that 84% of the restaurants visited, which totaled 9,000 establishments, had committed wage and hour violations related to the payment of tips.”

Torres García pointed out that at the local level, the Department of Labor and Human Resources does not have protocols or publications related to similar investigations that allow for an examination of the prevalence of such a practice in Puerto Rico, as well as the state of vulnerability and defenselessness of tipped workers.

According to federal statistics, women represent nearly 70% of the workforce that survives on wages supplemented by tips. Despite this, women in restaurant service earn around 21% less than their male counterparts.

“In recognition of the legacy of inequity that covers the salary distinction toward workers in industries that receive tips, we believe it is necessary and urgent to unify the minimum compensation for the country’s workforce, increasing the base salary of employees in the tipped industry, services excepted from the minimum wage established in Act 47-2021, Puerto Rico Minimum Wage Law, and whose salary is currently calculated based on mandatory decrees,” Santiago Nieves added.

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