LAS CRUCES – The city council will hear from business owners this morning, as well as from tipped workers like restaurant servers, in response to Mayor Ken Miyagishima’s proposal to temporarily lower the tipped wage in Las Cruces.
Most city councilors have said they’re opposed to the mayor’s idea to temporarily reduce the city’s tipped wage from $4.20 next year to $2.55 an hour, to match the state wage. The mayor has said it could help ease the burden on restaurants struggling to survive under capacity limits imposed due to the COVID-19 pandemic.
Because it’s a work session, no official action can be taken by the council.
You can follow along live here. Refresh the page every few minutes to see updates.
8:40 a.m. The city will also be broadly discussing the upcoming minimum wage increase in 2021, which includes the tipped wage. Because the state’s increase will be higher than the city’s projected increase, which is guided by cost of living, the city will adopt the state minimum wage of $10.50 an hour Jan. 1.
The city is guided by a minimum wage ordinance passed in 2014. Under city ordinance, the tipped wage will be 40 percent of the city’s minimum wage. Next year, it’s projected to rise from $4.10 to $4.20 an hour. The state’s 2021 tipped wage hike will rise from $2.35 to $2.55 an hour next year.
8:48 a.m. Chief Budget Office Leann DeMouche is explaining that the employer always needs to ensure tipped workers make at least the local minimum wage when the tipped wage and tips are added up. If that means the employer needs to make up a small difference, that is required.
DeMouche is reiterating options presented to the council last week in regards to the local ordinance. State Workforce Solutions Secretary Bill McCamley will be joining the meeting in a few minutes.
The options include repealing the city ordinance and going with state law, continuing to use the city ordinance or using a hybrid model, similar to the mayor’s plan.
If we did adopt a hybrid plan, Miyagishima says, he believes restaurants which are stronger won’t reduce wages or would reduce them only slightly.
8:51 a.m. McCamley is addressing the council now. He reiterates that workers must make the local minimum wage regardless. The employer is responsible for the difference on a day where tips may be bad.
McCamley’s department enforces minimum wage laws.
8:57 a.m. Miyagishima asked about adopting the state’s tipped wage for as little as three months and if employers can continue to pay more if they choose. They can.
District 2 Councilor Tessa Abeyta Stuve asked McCamley if employers are allowed to share a processing fee for credit cards with tipped employees. McCamley doesn’t know the specific answer, but generally understands the tips is the worker’s takeaway and that fees wouldn’t detract from that.
Abeyta Stuve asked, based on past server experience, if data exists outside a 40-hour work week example. She said it’s common to work 30 hours or fewer. McCamley said that data isn’t available.
9:02 a.m. McCamley affirmed employment trends have changed. “People are not just at one place. They’re putting different types of jobs together.”
One of the hardest sectors hit by COVID has been leisure and hospitality, McCamley said. He’ll provide councilors with county numbers.
District 4 Councilor Johana Bencomo asked McCamley to talk more about where accusations of wage theft come from. McCamley said restaurants, home health, and agriculture are commons sources of accusations.
9:05 a.m. McCamley said many claims of wage theft are attributable to honest errors, but that a few bad actors have existed. He said the state restaurant association agrees with cracking down on those who cheat, since it affects businesses who play by the rules.
Business owners who signed up will be allowed to speak now.
9:14 a.m. Charles Clements, a resident who says he has a solution, is not a business owner but has been allowed by the mayor to speak for 5 minutes. Clements said co-ops could be a solution to the “hostile economic solution at the national level.”
A cooperative effort between workers and owners could help cut costs and solve disputes, he believes.
Miyagishima said it echoes an idea he’s been toying with. He asked Clements to leave his contact information so they can discuss it further.
Amy Miller, general manager of Courtyard by Marriott at New Mexico State University, says she is against any minimum wage increase. Additional expenses will further or permanently break businesses, she said.
Jerry Silva from Save Mart Las Cruces said he just was here to listen. He agrees with Miller’s comments. “It would really help us if we could not have an increase.”
Silva said his business would be okay, but other, smaller businesses would not.
9:18 a.m. District 5 Councilor Gill Sorg points out the city can’t avoid the upcoming state wage hike, since it is state law.
Miyagishima said the city could also drop to the lower tipped wage, but employers could choose to pay anything above that if they don’t need the relief.
9:30 a.m. Marci Dickerson, from The Game Sports Bar and Grill and The Game II, said she’ll give information about what a typical worker paycheck looks like.
Dickerson said the mayor’s proposal won’t affect most servers in a negative way, because servers don’t even pick up their tiny paychecks, since that money pays their tax liability. “There’s a lot of money to be made in the serving industry.”
She said she gives raises to most of her workers, and the lower tipped wage would allow her to hire people at a lower starting level.
9:36 a.m. District 3 Councilor Gabriel Vasquez and Dickerson are going back and forth about the tax liability issue. Dickerson said servers may not be reporting all their tips accurately, because it raises their tax burden, but that tips are more automatically reported now with the rise in credit card transactions. That’s been especially true during the pandemic.
Vasquez said it makes him want higher tipped wages, since credit card transactions raise workers’ reported incomes and increase their tax liabilities. Dickerson said some cash transactions may still happen and go unreported, but that also many of her workers never have to pay taxes.
9:42 a.m. “Every single dollar counts” for low wage workers, McCamley says. He adds that it gets recycled back into the economy. Vasquez said those extra two dollars go a long way.
Abeyta Stuve said Dickerson has hit on something very important with how little the checks are. The councilor said while many do leave their tiny checks behind, she and her sister had to pick them up when they were food servers.
The restaurant industry also includes prep work that aren’t tipped hours, Abeyta Stuve said.
Abeyta Stuve asks if restaurants can hire new employees, they must be doing fine. Dickerson says her restaurants are doing fine, but she’s speaking on behalf of smaller restaurants.
Dickerson said those workers can only make tips if they have jobs and warns about permanent closures if capacity limits continue to hurt them.
9:50 a.m. “How do we keep as many of these people employed as possible?” Dickerson says, while adding the mayor’s proposal would be a good form of business relief.
Miyagishima interjects and says it would only be temporary. He echoes Dickerson’s statement that he’s more worried about businesses closing for good.
Abeyta Stuve said it has been difficult recently. She asked her brother, an Albuquerque restaurant manager, about what difficulties the industry faces. He told her operational and food costs have risen, since more pandemic related products need to be purchased.
Abeyta Stuve said this pits people against each other. Bencomo said she wants to make sure the council helps small business without making workers expendable.
10:00 a.m. Bencomo said people would rather be at work than on unemployment, but that tipped workers she’s heard from are worried every day they go into work they could catch the SARS-CoV-2 virus. Workers may not have enough money to pay potential medical bills, and owners and customers may not take pandemic health practices seriously.
Bencomo wants to know if there’s alternative ways to help small businesses. Miyagishima said the city could approve additional aid that conforms with the anti-donation clause.
The District 4 councilor compares the wage proposal to pouring salt in a wound and then applying a bandage.
City Manager Ifo Pili said he hasn’t sat down with staff to come up with a business aid proposal yet. But he said the city should look at things on an individual approach, finding out what specific things businesses are dealing with, and that a blanket approach may not work.
Francisco Pallares, from Economic Development, said the city’s Economic Recovery Board has been mulling a reduction in business registration fees for a year, as well as reducing late fees. That will be voted on Thursday.
Read or Share this story: https://www.lcsun-news.com/story/news/2020/09/22/city-council-live-tipped-workers-business-owners-address-wage-proposal/5863909002/