As Los Angeles city leaders ponder the steps they need to take to increase wages across the city, business owners are pushing hard to have tips counted toward minimum wage requirements for workers in the restaurant industry and other service industries where tipping is more common. Currently, California labor laws prohibit business owners from counting tips toward minimum wage requirements. But area restaurant owners claim increasing minimum wage levels across the city will force them out of business entirely unless they can use tips to offset their obligations.
The California Restaurant Association has been working to rally support. In response, state Assemblyman Tom Daly recently introduced association-sponsored legislation to loosen regulations that prohibit counting tips toward minimum wage, but he indicated the legislation failed to garner enough support to move forward, despite backing from L.A. Mayor Eric Garcetti.
Studies in other areas, including New York, where tips can be counted toward wage requirements, have found that complex rules can result in workers being significantly underpaid.