This bill would bring RI's tipped minimum wage up to $15. Could it pass this year?

• Tipped minimum wage the ire of restaurant owners

PROVIDENCE − Restaurateurs came out in force this week to oppose legislation that would gradually raise the tipped minimum wage to the actual minimum wage by 2030, as legislators took up a perennial slate of minimum wage bills.

While a proposal to gradually increase the tipped minimum wage, which has not increased since 2017, sucked up most of attention of lawmakers, three other proposed minimum wage changes were in front of the House Committee on Labor.

The other three bills:

• A bill that passed the House last year, and died in the Senate, requires domestic workers (maids, nannies, butlers, housekeepers) receive the minimum wage and be classified as employees.
• A bill to remove exemptions for some teenagers working for "nonprofit religious, educational, librarial or community service organizations," making 90% of the minimum wage ($12.60) and 14- to 15-year-olds making 75% of the minimum wage.
• A bill to increase the minimum wage to $20 by 2029 and then chain it to the rate of inflation.

'Domestic workers' exemption a function of racist, sexist past

Bill 7532, introduced by Rep. Leonela Felix, would make "domestic workers" employees and entitle them to minimum wage, overtime and everything else being an employee entails. Her bill passed the House last year and died in the Senate.

Rhode Island Center for Justice Attorney Sam Cramer wrote in testimony that, currently, domestic workers aren't eligible for anything. That means a family can demand someone work 80 or more hours a week what pay them whatever they want.

That also means domestic workers receive no overtime pay, and families can deduct food and board from their wages.

The history of exempting certain people from minimum wage, both for restaurant workers and domestic workers, is rooted in a history of discrimination, the Center for Justice wrote. Domestic workers, when the minimum wage exemption was created, were mostly people of color and women, Cramer wrote.

"You have an opportunity to set it right," ACLU Rhode Island Director Steven Brown said.

One woman they advised, a Black immigrant, would have been entitled to $70,000 to $400,000 in back wages and damages if domestic workers were considered employees, Cramer wrote.

"Instead, she was kicked out of the home she lived and worked in without notice, access to unemployment benefits, or any meaningful claim for relief," he wrote.

Should the minimum wage go up again?

Rep. David Morales, D-Providence, introduced House Bill 7579 that would increase the minimum wage to $20 per hour ($41,600 a year) by 2029 and then chain it to the consumer price index, a way of keeping up with inflation. The increases, from the $15 set for 2025, would be $1.25 per year.

Morales said an estimated 85,000 workers in Rhode Island make the minimum wage.

Nina Harrison, the Economic Progress Institute's policy director, cited the Massachusetts Institute of Technology's living wage calculator as evidence of why the minimum wage needs to go up, because no one in the state can afford to live off minimum wage. The living wage for a single person in Rhode Island is $24.24 ($50,419 a year).

The big guide:Everything you need to know about Rhode Island's minimum wage in 2024

Harrison said the pressing question to lawmakers is how many hours a week they think poor people should be required to work to be able to live.

"Is it 60 hours a week, to just get by?" she said.

Minimum wage workers (assuming a 40-hour work week) also make too much for many federal benefits, depending on if they have children or dependents.

Rep. Arthur Corvese said he was incredulous about the living wage calculations, citing how much they had gone up since 2022 and said he wanted to know where the increases were coming from, and that maybe the policies that "were put into effect the last several years pushed that up." He did not specify what policies he thought would have driven up costs.

The living wage calculator website breaks down where all the expenses come from, including:

• $4,740 for food
• $15,917 for housing ($1,326 a month)
• $9,638 for transportation
• $3,606 for medical expenses

Currently, a person working 40 hours a week at the minimum wage ($14 an hour) makes $29,120 before taxes. Next year, when the minimum wage rises to $15 an hour, it will be $31,200 a year, before taxes.

At the same time, rent costs in Rhode Island have significantly increased. For someone making minimum wage to not be housing cost burdened, or spending more than 30% of their income on rent, they could only pay $728 a month in 2024 and $780 in 2025.

Even at the MIT Living Wage Calculator's $24.24 an hour, a single person would find it hard to pay rent and not be cost burdened, spending a maximum of $1,260 a month.

Restaurant owners say restaurants would close if the tipped minimum wage increased

Restaurant owners, managers and a few wait staff lined up during the hearing to blast the proposed bill that would gradually increase the tipped minimum wage to $15 an hour by 2030. It is currently at $3.89.

Rhode Island Hospitality Association lobbyist Bill Walsh said the "key fact" was that "no tipped workers make less than minimum wage."

The law currently requires employers to pay their employees the difference between the minimum wage and the tipped minimum wage if tips don't get them there.

However, an Economic Policy Institute report found that, of the 9,000 restaurants investigated by the Department of Labor, 84% were violating wage laws, cheating tipped workers out of $5.5 million.

Rep. Karen Alzate said for her, it's a "funky" bill because she does not want people to be abused by not receiving the minimum wage, but she has also been paid well working as a server.

Walsh said the bill was a solution to a problem that does not exist, citing high median wages for tipped workers.

Bob Bacon, who owns the Gregg's Restaurant chain, said enacting the bill would cost him an extra $1.2 million a year.

Eliminating exemption for teenagers working for certain employers

Rep. Enrique Sanchez, D-Providence, introduced a bill that would eliminate the minimum wage exception for young people.

Teenagers, 14 and 15 years old, are only currently entitled to 75% of the minimum wage, $10.50 an hour.

Those under 19 who are "working in nonprofit religious, educational, librarial, or community service organizations" can be paid at 90% of the minimum wage, $12.60.

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Reach reporter Wheeler Cowperthwaite at wcowperthwaite@providencejournal.com or follow him on Twitter @WheelerReporter.