Has Tipping Gone Too Far?

Tipping is the voluntary demonstration of gratitude in exchange for a service. Although it’s standard practice to leave a tip for a server when dining out at a restaurant or to drop coins in a tip jar for baristas at the coffee shop, the number of hands extended to receive those tips seems to be growing.

Federal Tipped Minimum Wage

Waiters and waitresses receive a federal tipped minimum wage – the minimum wage required to be paid to tipped employees. This wage is set lower than the standard federal minimum wage to include customer tips which together can equal or exceed the federal minimum wage. However, if a tipped employee doesn’t make enough from their wage and tips to equal the federal minimum wage, their employer is legally required to make up the difference.

The president’s proposal to increase the federal minimum wage to $10.10 would raise the rate for tipped workers from $2.13 to $4.90 by 2016. Supporters of the wage increase say that it would help to boost the economy, yet others say the wage increase would force businesses to cut employee hours, lay off workers, and hire fewer people.

Minimum Wage Increases and Tips

Would you still tip if your server made a wage equal to or more than the regular (non-tipped) minimum wage? In cities like Seattle, where legislators are pushing to raise the minimum wage to $15 for everyone, some hourly wage workers have said they will stop tipping if their waiters make more than they do.

That begs the question: Do we tip for a job well done or are tips just something to be expected?

Tipping expert Michael Lynn says we are tipping out of guilt.

“It’s expected and they don’t want to risk disapproval for failure to comply with social norms … Many tipped employees are paid a substandard wage and this fact has created social pressures on consumers to tip even when the service is bad.”

According to an unpublished study done by Lynn that analyzes tipping patterns state by state, customers tend to tip less in states where the tipped minimum wage is higher. But it’s unclear whether higher tipped minimum wage is causing people to question how much they tip, or if state legislators are increasing the minimum wage because people aren’t tipping.

Where Do We Draw the “Tipping” Line?

No matter which side of the tipping line you are on, tipping for great service is sage advice. Tipping out of guilt … well, you should talk to your therapist about that. But should you tip your therapist? Although that may sound unreasonable, the line of people we do tip seems to be growing. It’s not just wait staff anymore. We tip bartenders, the pizza delivery person, coffee shop baristas, hotel maids, bellhops, taxicab drivers, hairdressers, manicurist/pedicurists, parking attendants, tour guides, musicians, golf caddies; the list goes on.

But do all of these professions really require a tip?

Stay Tuned for Part 2: Who Gets a Tip?

Minnesota Raising Minimum Wage Rate

The nearly 155% increase moves Minnesota from the bottom four U.S. states with lowest minimum wage rates.

Minnesota’s minimum wage rate will increase in stages beginning in August 2014, eventually reaching $9.50 per hour by 2016. Beginning in 2018, the rate would be indexed to the implicit price deflator to help Minnesota workers’ wage keep up with inflation, but any annual increases would be capped at 2.5 percent of the previous rate.

The state’s current minimum wage is $6.15 per hour, but most businesses use the higher federal rate of $7.25 per hour. Minnesota’s minimum wage had not increased since 2005.

Senator Jeff Hayden, the Senate Bill’s author, said about 315,000 Minnesotans would benefit from the minimum wage increase.

The measure faced strong opposition in the Minnesota legislature. The Senate version eked out a 35-31 win and the House of Representatives voted 71-60. Governor Mark Dayton signed the bill into law April 14, 2014.

Minnesota Minimum Wage Timeline: Phasing In the Increase

Businesses with gross sales of $500,000 or more:

  • August 2014: $8.00 per hour
  • August 2015: $9.00 per hour
  • August 2016: $9.50 per hour

Large business can apply a $7.75 minimum wage rate for a 90-day training wage for 18- and 19-year-old employees, all 16- and 17-year-old employees (even after 90-day training), and employees who are foreign medical graduates working under a J1 visa.

Businesses with gross sales less than $500,000:

  • August 2014: $6.50 per hour
  • August 2015: $7.25 per hour
  • August 2016: $7.75 per hour

All Minnesota Businesses to Index to Inflation in 2018

Beginning in 2018, all wages would increase each year on January 1 by inflation measured by the implicit price deflator capped at 2.5 percent.

Minnesota Minimum Wage Posting Requirements for Employers

Employers will be required to display the new version of the Minnesota Minimum Wage posting. For customers enrolled in the GovDocs Update Program, we will provide the revised posting once it is released.

Lowest State Minimum Wage in the U.S.

Once Minnesota’s minimum wage increase takes effect, three states will retain minimum wage rate lower than the federal minimum wage of $7.25:

  • Georgia: $5.15
  • Wyoming: $5.15
  • Arkansas: $6.25

Minnesota Employers: Get Ready!

Minnesota Minimum-Wage Workers About to Get a Raise?

Map of minimum wage rates in the United States...

Map of minimum wage rates in the United States. (Photo credit: Wikipedia)

Minnesota may see an increase in its minimum wage in the 2013 legislative session. The Minnesota House of Representatives is debating a proposed rate hike to $9.50 whereas the state Senate is considering a more modest rate of $7.50. Democrats control both houses of the state’s legislature making passage of an increase likely, and Democratic Governor Mark Dayton already stated he would sign a minimum wage rate increase into law.

If passed, either increase would be the first increase for Minnesotan minimum wage earners since 2005.

The state’s minimum wage for large employers currently is $6.15 per hour, though many workers automatically receive the higher federal minimum of $7.25 per hour. Minnesota is one of only four states nationwide where the minimum wage on the books is lower than the federal minimum wage of $7.25 per hour. Arkansas, Georgia, and Wyoming also have state minimum wages that fall below the federal minimum wage rate.

In a 2012 report, the Minnesota Department of Labor and Industry estimated 6.1 percent of Minnesota’s hourly workers were paid $7.25 an hour or less. The Department’s report also found:

  • Adjusted for inflation, the Minnesota minimum fell from $8.36 in 1974 to $6.15 in 2011.
  • Of all Minnesota hourly workers paid $7.25 or less, 45 percent work in food preparation and serving occupations.
  • Those without a high-school degree made up 31 percent of all hourly workers at or below the minimum wage.

Submitted by Chaunce Stanton

2013 State and Federal Minimum Wage Rates

[rs-image img_url=”https://www.govdocs.com/wp-content/uploads/2013/05/Screen-Shot-2013-05-23-at-1.44.52-PM.png” link=”” alt=”” width=”” height=”” type=”img-rounded” border=”img-polaroid” new_win=”no” margin=”” pos=”pull-left” wrap=”no”/]

With ten states increasing their minimum wage rates in 2013, it’s a great time to make sure all your locations have the most updated required postings. The ten states increasing their 2013 minimum wage rates are:

By clicking on “order now” you can select the latest GovDocs state-on-one and federal-on-one posters, which contain all required postings for most U.S. employers.

Wage Rate
Federal $7.25 7/24/2009 Order Now
Alabama $7.25
(Federal rate)
7/24/2009 Order Now
Alaska $7.75 1/1/2012 Order Now
Arizona $7.80 1/1/2013 Order Now
Arkansas $7.25 7/24/2009 Order Now
California $8.00 1/1/2008 Order Now
Colorado $7.78 1/1/2013 Order Now
Connecticut $8.25 1/1/2010 Order Now
Delaware $7.25 7/24/2009 Order Now
District of Columbia $8.25 7/24/2009 Order Now
Florida $7.79 1/1/2013 Order Now
Georgia $7.25 7/24/2009 Order Now
Hawaii $7.25 1/1/2007 Order Now
Idaho $7.25 7/24/2009 Order Now
Illinois $8.25 7/1/2010 Order Now
Indiana $7.25 7/24/2009 Order Now
Iowa $7.25 7/24/2009 Order Now
Kansas $7.25 7/24/2009 Order Now
Kentucky $7.25 7/1/2009 Order Now
Louisiana $7.25
(Federal rate)
7/24/2009 Order Now
Maine $7.50 10/1/2009 Order Now
Maryland $7.25 7/24/2009 Order Now
Massachusetts $8.00 1/1/2008 Order Now
Michigan $7.40 7/1/2008 Order Now
Minnesota $7.25 7/24/2009 Order Now
Mississippi $7.25
(Federal rate)
7/24/2009 Order Now
Missouri $7.35 1/1/2013 Order Now
Montana $7.80 1/1/2013 Order Now
Nebraska $7.25 7/24/2009 Order Now
Nevada $8.25 1/1/2010 Order Now
New Hampshire $7.25 9/1/2008 Order Now
New Jersey $7.25 7/24/2009 Order Now
New Mexico $7.50 1/1/2009 Order Now
New York $7.25 7/24/2009 Order Now
North Carolina $7.25 7/24/2009 Order Now
North Dakota $7.25 7/24/2009 Order Now
Ohio $7.85 1/1/2013 Order Now
Oklahoma $7.25 7/24/2009 Order Now
Oregon $8.95 1/1/2013 Order Now
Pennsylvania $7.25 7/24/2009 Order Now
Rhode Island $7.75 1/1/2013 Order Now
South Carolina $7.25
(Federal rate)
7/24/2009 Order Now
South Dakota $7.25 7/24/2009 Order Now
Tennessee $7.25
(Federal rate)
7/24/2009 Order Now
Texas $7.25 7/24/2009 Order Now
Utah $7.25 7/24/2009 Order Now
Vermont $8.60 1/1/2013 Order Now
Virginia $7.25 7/24/2009 Order Now
Washington $9.19 1/1/2013 Order Now
West Virginia $7.25 7/1/2008 Order Now
Wisconsin $7.25 7/24/2009 Order Now
Wyoming $7.25 7/24/2009 Order Now