Balancing the tip issue

Democrats and Republicans disagree whether Washington workers who get part of their wages from tips would have been affected by a congressional proposal to raise the federal minimum wage under a plan the U.S. Senate rejected last week.

Each side points to a report by an agency to buttress their case. Here’s a look at those reports:

“Congressional Budget Office, in an Aug. 1 letter to Sen. Judd Gregg, R-N.H, said that the bill would cut wages to employees who get tips. The proposal “would pre-empt the minimum wage laws of states that exclude tips from being considered as wages if certain employees have been paid the applicable minimum wage rate. That pre-emption would be considered an intergovernmental mandate as defined in (federal law) …”

“Congressional Research Service, in an Aug. 2 memo to Sen. Barbara Boxer, D-Calif., said it probably would cut wages. “States (where tips by law aren’t calculated as part of wages) would seem to be prohibited from enforcing the minimum wage rate provisions of their laws with respect to a tipped employee unless such laws are revised or amended …”

“U.S. Department of Labor, in an Aug. 2 memo from Assistant Secretary Victoria Lipnic to Senate Majority Leader Bill Frist, R-Tenn., said it probably would not cut those wages. If the law passes, the department “would read (the section) as protecting minimum wages of tipped employees in the seven states that now exclude a tipped employee’s tips from being considered wages because to do otherwise would be inconsistent … with the intent of Congress and the Fair Labor Standards Act … Nevertheless, we are aware that some have argued (the section) is ambiguous.”

“Washington State Department of Labor and Industries, in an Aug. 3 memo from Director Gary Weeks to Sens. Patty Murray and Maria Cantwell, said it probably would cut those wages. “Under our preliminary analysis, this proposal in effect appears to nullify an employer’s obligation to pay the minimum wage rate under (state law) with regard to tipped employees. This means that Washington workers who receive tips – typically service industry workers – would see a decrease in income” unless the Legislature amends current law to reinstate the exemption for tips.