TRENTON – Workers that rely on tips could soon see an increase in their base salary after a bill to increase the minimum wage for tipped workers cleared the Assembly Labor Committee on Monday morning.
A2708, sponsored by Assemblywoman Shavonda Sumter (D-35), Paterson, was advanced by a vote of 6-2-1 vote along party lines.
The bill would require employers to pay tipped employees an hourly rate of $2.90 per hour after June 30, 2012, and an hourly rate of $5 per hour after June 30, 2013. These numbers would increase to $3.40 and $5.10, respectively, should the Democrats increase the state minimum wage later this year.
Most employees who rely on tips or gratuities are currently paid the federal minimum wage for tipped workers of $2.13 per hour, according to the bill.
Sumter, at the hearing, said that her bill would “gradually move the Garden State” away from what she called a failed $2.13 federal minimum.
“If this legislation moves forward, it would also help out our state’s economy as a whole,” Sumter said. “This is money that will go into the pockets of working New Jerseyans.”
Tom Ingegneri, the owner of the Cranbury Inn in Cranbury, opposed the legislation, citing financial strains on his business in the current economic climate.
“My wife and I have been working 90 hours a week because we can’t afford a manager because of all the things that are happening with the economy,” Ingegneri said.
The New Jersey Business and Industry Association, members of the New Jersey Restaurants Association, and New Jersey Retail Merchants Association were also among a number of business organizations that opposed the measure. Many employers testified that since money is tight, they would have trouble keeping up with the proposed increase.
George Evinger, who owns multiple International House of Pancake restaurants in New Jersey and is on the National Restaurant Association Board, also testified against the legislation.
“I am down 20 percent over the past three years,” Evinger said. “If I have to cover another $1,000 per week; I have to reduce my (personnel) costs.”
Evinger said he currently employs tipped workers that earn $14 to $15 per hour, much higher than the minimum wage.
Elizabeth Nisbet, a Postdoctoral Research Associate at the Center for Women and Work at Rutgers University, testified in favor of the bill.
“This could positively impact the economic security of employees and the state of New Jersey,” Nisbet said, adding that the spending as a result of the bill would boost the economy.