Proposed wage hike raises concerns for restaurant, server
A proposed minimum wage hike for liquor servers, or anyone who waits on tables in a licensed establishment, is being seen as a bit of a gamble for both servers and restaurant owners.
In advance of the next provincial election, the Ontario government announced last week it will introduce legislation that, if passed, would raise the general minimum wage from $14.35 to $15 per hour effective Jan. 1. Under the proposed changes, the special minimum wage rate for liquor servers would be eliminated. Servers would also make $15 per hour, a raise from the current $12.55 per hour.
The announcement was made as part of the Ford Government’s Fall Economic Statement, reversing his earlier decision to cancel a previously approved wage increase.
“Ontario’s workers have been the unsung heroes of this pandemic, as they’ve stocked shelves, kept our supply chain moving and helped so many of us enjoy a meal among family and friends at a local restaurant,” said Premier Doug Ford. “When we asked labour leaders what their priorities were, increasing the minimum wage was at the top of the list. As the cost of living continues to go up, our government is proud to be working for workers, putting more money into their pockets by increasing the minimum wage.”
The Office of the Premier said in a statement, “liquor servers have previously received below the general minimum wage, based on the belief customer tipping can make up the difference. However, many of these workers have increasingly seen their tips pooled and redistributed among many staff, making it harder for them to make ends meet.”
However, there is a concern amongst those in the industry that if people stop tipping, or reduce their tips, the server won’t come out with a raise.
Chez Michel’s Milynne Benoit said speaking from a purely economic point of view, the restaurant has to cover its costs and if the wage increase is approved, those costs would have to go up, again.
Chez Michel is launching a new menu and has just raised its prices to reflect an increase in food costs, partially due to lack of supply and pandemic related issues. Benoit said even take-out packaging costs have increased.
“We shouldered the food costs through the pandemic, we didn’t raise our prices at all we just bit the bullet and took the hit, and we just made less money,” she said.
As an example, Benoit said their cost for a lobster tail jumped from $3 before the pandemic to $11 each. They swallowed the loss for two years but have now pulled it from the menu for that reason.
“All items were like that. We had to accommodate our pricing based on that so now we are going to have to go through it and do it all again with the rise in minimum wage.”
Benoit said she hasn’t yet consulted with her staff, many of whom are professional servers with mortgages and families. She plans to float the idea to the waitstaff that the restaurant pay a much higher hourly wage and communicate to customers that tipping is not expected.
“But they’d probably end up making less money at $18 per hour than they would at $12.55 per hour with their tips,” said Benoit.
It is probably the norm for most servers to make about $100 to $200 in tips during a busy shift, but they could make much more depending on the type of establishment and their skill level.
“That’s the sacrifice they make too. They’ll make bank in the summer and then in the wintertime they make nothing so now they would have a permanent wage to fall back on in the winter,” she said.
Personal experience tells her that there will be concerns about how everything evens out in the end when all is considered. For instance, a higher income could mean more taxes are deducted from the server’s paycheque and how will the wage increase will change the way people tip.
“I’m hoping that it doesn’t affect them as much because of the type of restaurant we are,” said Benoit. “We have a lot of affluent clientele who understand where our servers are at and what kind of environment they are trying to provide for their families, and they will probably still tip.”
She said that may not be the case for other dining establishments where people are paying more on the bottom line and may reduce the tip.
Chez Michel servers do pool their tips and share with certain kitchen staffers but Benoit said that is not the typical model in the industry. She said most servers keep their own tips at the end of the shift, after paying a portion to the kitchen staff.
On the flip side, they could earn more towards a maternity leave for instance, and a higher wage guarantees a certain income, regardless of peak season or big spenders.
She sees the benefits but says messing around with an industry that has taken a hit during the pandemic is annoying, and just one more hurdle to deal with.
A server who works at a chain restaurant in Collingwood agreed to be interviewed by The Echo if she could do so anonymously.
Her biggest concerns relate to how a wage increase could cause more uncertainty in an industry that is already somewhat precarious. She works about 30 hours per week, and says it would probably be more but all restaurants have had to limit hours because they can’t find enough kitchen staff. She also has a second job but not as a server.
She makes the minimum wage of $12.55 per hour and the restaurant where she works does not pool tips. She said she can make between $130 to $170 in tips per shift, depending on how long the shift is and whether it’s in prime hours.
“It’s a gamble every time you go to work,” she said. “You might make money but you might not.”
Of the proposed wage hike she said, “On the surface you would think that it would be a positive thing that you’re making more an hour but truthfully I’m concerned.”
She said she fears that the general public will start to equate the job with other minimum wage jobs and think, ‘Well, I don’t tip them.’
“I fear that it was a social contract in the past where everyone knew servers make less than minimum wage… and tipping is already a contentious issue anyway,” she said.
She has worked as a server on and off for 20 years and works with people who have made careers as a server, spending many years at the same restaurant. She said many of her coworkers, at least those who are aware of the pending legislative change, are happy about the wage increase and say, it’s about time.
It’s an interesting industry, she said, because servers work in the field by choice because that gamble pays off for them, and it is a pretty good job for people without other skills or qualifications.
Career servers are able to raise families and get mortgages, but she acknowledges the pay increase would be beneficial when accessing employment insurance or maternity leave.
But she makes the point that $15 per hour is still not much and that this change isn’t going to save the world.
“I hope it would be a positive change but I guess time will tell,” she said.
Living wage for Simcoe County is calculated at $19.05, according to the Ontario Living Wage Network. The living wage reflects what people need to earn to cover the actual costs of living in their community. The living wage draws on community-specific data to determine the expenses to a family with two working adults and two children.
The living wage calculation includes only the basic necessities, childcare, transportation, medical expenses, recreation and a modest vacation, and does not include money for savings, debt repayment, or home ownership.
If the new minimum wage legislation passes, it would come into effect on Jan. 1.