
[V]ermont restaurant industry advocates hope to clarify this coming year a secondary minimum wage issue that’s now mixed in with the push for a $15 minimum wage: the tipped minimum wage.
The general minimum wage in Vermont is $10.50 an hour. Under legislation passed in 2017, it will rise with the consumer price index each year starting in January. This January, the overall general wage will go up to $10.78 per hour.
Tipped workers, such as waitstaff, cannot earn less than half the minimum wage. Therefore, as the overall minimum wage goes up, so too does the tipped workers’ minimum. Under state law, if the basic minimum wage and tips don’t bring servers’ hourly pay up to the general state minimum wage, employers pay the difference. Some restaurant owners would like to see the issues separated, so when the general minimum wage is raised, the tipped wage doesn’t automatically rise too.
The issue of the overall minimum wage and the minimum for tipped workers are built into the same legislation, and for years, the Vermont Chamber of Commerce has worked on both issues at once. In the case of the overall minimum wage, the chamber is trying to slow increases to reduce the impact on employers.

With its work on the minimum for tipped employees, “we’re bringing it to a greater level of priority, where in the past it has usually played second fiddle to the larger minimum wage discussions,” said Betsy Bishop, the chamber’s executive director. “With each passing year, we’ve educated legislators, and with that understanding will come action.”
Bishop and restaurateurs said one of the largest obstacles they face is getting lawmakers and others to understand the impact of having the two minimums tied together.
The money employers spend on increasing the tipped minimum would be better used to help back-of-house employees, said Eric Warnstedt, an owner of Hen of the Wood in Waterbury and Burlington and the Doc Ponds restaurant and bar in Stowe. He said his wait staff make an average of $26 an hour including the minimum and tips.
“To get them to more per hour makes no sense,” he said. “We should be pushing that (increase) to the back of the house or to the managers, because the front-of-the-house employees make more than the front-of-the-house managers.”
The restaurateurs who have testified in the Legislature and spoken to other Vermont policymakers on the issue said they don’t want to be perceived as opposing wage hikes, or workers.
“We’re not anti-minimum wage, we’re just anti-coupling,” said Mark Frier, who owns Reservoir in Waterbury, the Bench in Stowe and Tres Amigos & Rusty Nail Stage in Stowe with about 150 employees between them. Frier, like Warnstedt, has worked closely with Bishop and at the Statehouse on the issue of “uncoupling” the minimum wage and the tipped minimum wage so that the tipped wage would stay the same even if the overall minimum rises.
“I’m not trying to be the big bad employer,” Frier said. “I am really trying to protect wages and protect my staff and jobs.”
Two years ago a summer study committee on wages briefly mentioned the topic of the tipped worker wage in its final report. Bishop said she’s seeing the issue gain traction as she and the restaurateurs explain it to policymakers.
“There’s not a large profit margin in the restaurant business, and as we further educate policymakers on that, and they fully understand the impact of this, we think they will come to see this is the right thing to do,” she said.

Compared to other states, Vermont is in the middle of the pack when it comes to the minimum wage for tipped employees, said Sen. Michael Sirotkin, D-Chittenden, who was the lead sponsor of a bill in this year’s legislative session that sought to raise the overall minimum wage to $15 per hour by 2024. The Legislature passed the bill, but Gov. Phil Scott vetoed it.
Sirotkin said the study committee ran out of time to examine the issue of disconnecting tipped wage increases from increases to the overall minimum wage.
“I think it’s worthy of further study, but where we land I just don’t know at this point,” he said earlier this week.
So far in the Statehouse, Frier and Warnstedt said most Democrats are focused on the general minimum.
“I’m extremely liberal, but we had a hard time getting people on our side of the line to listen, because for most of the part they just want to push the minimum wage through,” said Warnstedt. “We were looking for more of an honest dialogue about decoupling the minimum wage. A least we opened the door last year a little bit to a handful of people listening to us.”

