Policy Recommendation

Supporting Tipped Workers in the Pandemic and Beyond

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City University of New York

This memo is part of Beyond Flattening the Curve, a series of policy recommendations for the COVID-19 crisis.

COVID-19 has cast a floodlight on the weakness of America’s safety net for workers. My research highlights several short- and long-term policy strategies that can help address economic insecurity and the labor market inequities that amplify it. A comprehensive plan to check the growth of workers’ economic insecurity during the crisis and in the reverberations to follow could include universal paid sick days and family leave, universal health care, increases in food assistance, and policy mechanisms that allow gig workers to access safety net programs like unemployment insurance. One group – tipped workers, like those who work in most restaurants – can benefit from legislation that would ensure they receive living wages as the pandemic recedes.

In the short term, employment insurance and social safety net programs are critical to provide much-needed cash assistance to workers who have been displaced. In the long term, social distancing may gradually be relaxed but it is unlikely guidelines will be fully reversed. Therefore, many workers may return to work, but perhaps for fewer hours – and therefore, to a reduced paycheck. For example, restaurants could reopen, but with social distancing measures in place that limit the number of customers in the dining room or workers who could be in the kitchen at once. And some of the most vulnerable workers who depend on tips may see sustained customer volume decrease. 

To truly support this sector, Congress needs to eliminate the sub-minimum tipped wage for restaurant workers. If restaurants will be practicing “social distancing” when they re-open, restaurant workers will be serving fewer customers and consequently receiving less tips. There is existing legislation that we can build from. In 2019, the United States House of Representatives made a historic vote on the Raise the Wage Act of 2019 (HR 582), which includes Complete Wage – increasing the federal minimum wage for all workers, including tipped workers. This legislation needs to be fast-tracked through Congress and implemented immediately to help better ensure restaurant workers’ economic security.