February 24, 2019

Minimum wage bills advance, but Dems back off tipped wage increase

Democrats are backing off a proposal to phase out the lower minimum wage for tipped workers like restaurant waiters with a Senate committee voting Saturday to keep the separate rate in place but raise it.

House Bill 31 would have eliminated the tipped minimum wage of $2.13 an hour.

Employers can currently pay that rate to workers as long as those workers receive tips amounting to the statewide minimum wage of $7.50 an hour.

The restaurant industry says the tipped minimum wage is key to its survival and has launched an intense lobbying campaign against proposals to abolish it. But others argue that raising or eliminating the lower tipped wage would amount to a significant boost in the base pay for many restaurant workers.

The House of Representatives approved a version of House Bill 31 last week that would keep the tipped minimum wage in place but phase it out by 2022.

“We wanted to give our tipped employees a bump in terms of their wages, but we also wanted to consider some of the lack of standardization in terms of the tipped credit statewide,” said one of the bill’s sponsors, Rep. Miguel Garcia, D-Albuquerque.

But Garcia proposed that the Senate Public Affairs Committee change the bill Saturday to keep the lower tipped wage in place and raise it to 30 percent of the statewide minimum wage.

The committee voted 4-1 along party lines to advance the bill.

House Bill 31 would raise the minimum wage to $10 an hour in July, $11 an hour a year later and $12 an hour in July 2021. The state would adjust the minimum wage each following year based on the cost of living.

So, the tipped wage would rise to $3 an hour this year, for example.

But some Senate Democrats have their own proposal to raise the minimum wage.

Senate Bill 437 would would raise the rate to $9.25 an hour in October and then to $10 in April 2020.

Sponsored by Sens. Clemente Sanchez and John Arthur Smith, the bill would keep in place the tipped minimum wage but raise it to $2.38 in October and then $3 in April 2020.

“It gives the employers a way to budget and ramp up to what it will be,” Sanchez said Saturday in defending the smaller increase.

Backed by several business groups, the bill also would allow employers to pay a minimum wage of $8.50 to high school students.

But some Democrats are opposed to allowing a local minimum wage for teenagers.

“The notion that they’re not earning their keep at minimum wage, I just don’t buy into,” said Sen. Jeff Steinborn, D-Las Cruces, who voted against Sanchez’s proposal.

Moreover, Senate Bill 437 would not adjust the minimum wage annually in the future to keep up with inflation, a difference that is likely to become the main point of contention as both bills wend through the Senate.

Businesses argue that adjusting the minimum wage annually based on inflation would leave them with another element of uncertainty and make financial planning all the harder. But some cities with higher minimum wages, such as Santa Fe, already adjust the rate annually. And backers argue it is key to ensuring the minimum wage remains a meaningful floor for the pay workers receive.

Gov. Michelle Lujan Grisham campaigned on the sort of minimum wage increase approved by the House and on indexing the rate to inflation.

But the Senate Public Affairs Committee voted 3-2 to advance Sanchez’s bill, too.

And both pieces of legislation go next to the Senate Corporations and Transportation Committee, which he chairs.

The proposals are likely to continue changing, said Senate Public Affairs Committee Chair Jerry Ortiz y Pino, D-Albuquerque.

“This is far from being done today,” he said.