Washington D.C. – During a Committee on Education & the Workforce, Subcommittee on Workforce Protections hearing titled “Examining the Biden-Harris Attacks on Tipped Workers,” several industry experts expressed their support for the tip credit.
Tom Boucher, CEO and Owner of Great New Hampshire Restaurants Inc., testified on behalf of the National Restaurant Association. Boucher stated, “The tip credit is vital to restaurants like mine. It allows employees to earn significantly more than the federal minimum wage while helping restaurants manage labor costs.”
Boucher’s testimony highlighted that tipped servers and restaurant owners, with support from the National Restaurant Association and state restaurant associations, have successfully preserved the tip credit in 13 states and three municipalities this year. A survey of nearly 4,000 tipped workers in states facing threats to eliminate the tip credit found that nearly all (90%) prefer the current system over higher flat wage models, with more than eight in ten (87%) fearing a drop in earnings if employers were required to pay the full minimum wage.
In his testimony before the House Committee on Education and the Workforce, Subcommittee on Workforce Protections, Boucher detailed his experience in the industry: “What began as one small restaurant in 1984 has grown into nine locations, employing 800 people and serving over two million guests annually.” He emphasized that running a restaurant involves managing razor-thin margins and that legislation not accounting for industry realities can have serious unintended consequences.
Boucher underscored two key issues affecting restaurants: the tip credit and the Department of Labor’s 80/20/30 rule. He argued that eliminating the tip credit would lead to increased prices, reduced staff hours, or even closures. In Washington D.C., he noted nearly 1,000 restaurant jobs were lost after voters passed Initiative 82 to phase out the tip credit.
Additionally, Boucher addressed concerns about reinstating rigid rules like the Department of Labor’s 80/20/30 rule. This rule restricted how much time tipped employees could spend on non-tipped tasks. The Fifth Circuit Court of Appeals struck down this rule as impractical for reflecting industry realities. Boucher supports H.R. 1612—the Tipped Employee Protection Act—to prevent similar burdens from returning.
In conclusion, Boucher urged policymakers to consider real-world consequences when making decisions impacting local economies and employment within the restaurant industry.
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