Servers taxed on top of low minimum wage

By Carmen Pena
Flapjack Chronicle

In New Mexico, waitresses are only paid a minimum wage of $2.13. When Michele Alvarez, a now 52-year-old math teacher, was a waitress in 1986, the wage was the same. Alvarez was taxed five percent of what she made off minimum wage and 15 percent of her total sale of food sold per night combined.

“The government counts tips as part of a server’s income,” Alvarez said. “Tips were expected to offset the rest and I was taxed on tips whether I received them or not. I once received a paycheck of two cents.”

The Fair Labor Standards Act is a federal labor law that allows servers paychecks to be slaughtered through taxation. The federal level of minimum wage on tipped employees is $2.13. According to Esther Obregon, a tax consultant from Ivanhoe, Calif., although states can require a higher minimum wage, 13 of them stick to the federal minimum, which hasn’t been raised in 22 years.

Alvarez was a waitress at a Red Lobster in Albuquerque, NM., for eight years.

Many activists are taking this matter into their own hands. Restaurant Opportunities Center (ROC) has started a campaign called Living Off Tips. This campaign sheds a light on the struggle restaurant servers’ face having to live off of their tips since their wages are so low. According to ROC, restaurant workers today make up a significant amount of the people living in poverty. Even though the federal minimum wage has not been raised since 2009, the wage for tipped workers has not been raised since 1991.

When it comes to California, servers are paid minimum wage but still get taxed substantially.  Nineteen-year-old marine biology major Taylor Leischner is a server at Fiesta Grill and Cantina in Arcata. Leischner is taxed 8 percent of her total sales. So say she serves a total of $950 one night, eight percent of that would be $76, which is then taken out of her bi-monthly paycheck. It is assumed that she makes up for the loss of that money in tips. But what many people don’t take into consideration is that many waitresses distribute their tips. Leischner gives 30 percent of her tips in a trickle down affect. 10 percent goes to bussers, five percent goes to hostess, and 15 percent goes to the kitchen.  Tips are a huge part of her salary which is important for her to be good at her job.

“You’re coming to a restaurant for not only the food, but for the experience,” Leischner said. “If a server gives you bad service, don’t feel the need to tip.”

When her paycheck, along with many other servers’, is so little; tips are an immense part of the job. Only earning about $200 dollars a month but about $600 in tips, tips are what makes her rent at the end of the day.

“At the end of the night, if I walk out making less in tips than what I am being taxed, I’m paying to serve,” said Leischner.


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