Category Archives: Our Reports

DC report

The Case for Eliminating the Tipped Minimum Wage in Washington, D.C.

In collaboration with the National Employment Law Project (NELP), ROC United released “The Case for Eliminating the Tipped Minimum Wage in Washington, D.C.” in May 2016.

The report responds to legislation to raise D.C.’s wage floor to $15 and increase the subminimum tipped wage to 50 percent of the full minimum wage proposed by Mayor Muriel Bowser and the Council of the District of Columbia. While an improvement compared to current law, the Mayor’s proposal would nonetheless leave behind a significant number of low-wage workers—namely, the nearly 29,000 workers in D.C. that work in predominantly tipped occupations.  Under the current law, employers can pay these workers just $2.77 per hour, as long as tips cover the difference between the regular minimum wage and the subminimum tipped wage.

Being forced to rely largely, or entirely, on tips for income, D.C., tipped workers unsurprisingly experience poverty at nearly twice the rate of other D.C. workers,  and women feel the impact of the tipped minimum wage most acutely—women are twice as likely to live in poverty as the male tipped workers.  And despite the restaurant industry’s claims that tipped servers and bartenders earn high incomes in D.C., the median wage for tipped servers was just $9.58 per hour, including tips, between 2012 and 2015, according to the Bureau of Labor Statistics.  This median wage is just slightly higher than the full minimum wage for that period.

ROC-DC member Jessica Martin knows all too well the hardships of living off tips: “Working over 50 hours a week I still never received a paycheck because my wages were too low to cover taxes. We need One Fair Wage to lift thousands of DC workers and residents out of near poverty conditions and institutionalized worker discrimination.”

Tipped workers’ reliance on tip for income also forces them to tolerate sexual harassment and other inappropriate behavior from customers, co-workers, and management.  Workers in states with a tipped minimum wage like D.C. are twice as likely to experience sexually harassing behavior in the workplace, and over 90 percent of restaurant workers surveyed in D.C. reported experiencing some form of sexualized behavior while at work.

The evidence is mounting that the restaurant industry is thriving in cities such as San Francisco, Seattle, and SeaTac, Washington—all of which have approved a $15 minimum wage for all workers, including tipped workers.  Since Seattle passed its trailblazing $15 minimum wage, the number of food services and beverage industry business licenses issued by the city has increased by 6 percent.  The evidence also shows that a One Fair Wage system will not lead to the elimination of tipping or significant drops in tipping rates. The restaurant industry in D.C. can afford “One Fair Wage”—that is, the elimination of a subminimum wage for tipped workers in favor of one fair wage for all workers.

Find the full report here.

payroll card

The High Cost of Getting Paid: How Payroll Cards Cost Darden Employees

“The High Cost of Getting Paid: How Payroll Cards Cost Darden Employees,” examines Darden Restaurants’ use of payroll cards, which apply costly hidden fees to over a hundred thousand of their low-wage employees.

The study, based on an in-depth survey of over 200 Darden employees, examines the unsubstantiated claim that the cards are a convenient substitute to cash or checks for employees without traditional bank accounts. The findings show that thousands of low-wage workers at Darden are actually paying high fees just to access their own earned wages. In addition to detailing the many troubling impacts that payroll cards have on workers, the report also outlines a set of policy recommendations to protect Darden workers and can serve as a model to protect other low-wage employees nationwide.

Darden’s tipped servers reported special complications using the payroll card. In states where tipped employees earn the federal subminimum wage of $2.13 per hour, much if not all of their wages go towards paying taxes. For tipped workers, fees can create an additional barrier to accessing wages on the payroll card because fees amount to a larger percentage of their wages. This provides a disincentive for workers to access their wages via the payroll card and may have the effect of allowing Darden to shift the costs of doing business onto their already low-wage tipped workforce.

Key findings include:

  • 76% of employees reported having to pay fees to access their wages at the ATM.
  • 42% reported experiencing problems accessing their wages through the payroll card.
  • 24% of employees reported fees at point-of-purchase.
  • 63% reported that they were not told about all of the fees associated with the card before it was issued to them.
  • 49% reported that they do not have access to ATMs that do not charge them a fee to access their wages.
  • 26% reported not being allowed to choose an alternative method of payment to the Darden payroll card.
  • 23% of employees reported not being given instructions on how to use the Darden Card.
  • 54% of employees who used the card to fill up their gas tanks have experienced large authorization holds on their card as a result.

Recommended solutions for policymakers include:

  • Support legislation that eliminates the lower minimum wage for tipped workers.
  • Pass legislation that ensures workers have unlimited free access to the entirety of their wages.
  • Provide clarity to employers about how to offer payroll cards in compliance with the law.
  • Require that workers be clearly informed about card fees in multiple formats in plain English, supplemented by a hard copy of the fee schedule in the workers’ first language, before being issued their payroll card.
  • Allow workers to withdraw wages and verify account balances free of charge by telephone and at an accessible network of ATMs.
  • Ban inappropriate fees for basic account information, declines, overdraft fees, and other fees that constitute a barrier to a worker’s free access to their wages.

Find the full report here. 


Working Below the Line

Working Below the Line: How the Subminimum Wage for Tipped Restaurant Workers Violates International Human Rights Standards

In collaboration with the UC Berkeley Food Labor Research Center and the UC Berkeley International Human Rights Law Clinic, ROC United released the report “Working Below the Line” on International Human Rights Day, December 10, 2015.

The report finds the two-tiered minimum wage system violates several provisions of international agreements such as the Universal Declaration of Human Rights, especially for women and workers of color.

Under the current two-tiered wage system, federal law allows employers to pay workers who earn tips a subminimum wage of $2.13 an hour. As a result, several international human rights standards are not met for these workers, including:

- An adequate standard of living and to fair compensation: Although international labor standards require states to enable workers to maintain a suitable standard of living and to “just and favorable remuneration,” federal law allows tipped restaurant workers to be paid less than the regular minimum wage. As a result, these workers are at least two times more likely to live in poverty than the general U.S. population. “Wage theft” and other wage violations by employers is also a significant problem.

–  Protection from discrimination based on gender and race: Sexual harassment as well as gender and racial discrimination abound across the restaurant industry. One investigation concluded that workers in food services accounted for 37 percent of all claims of sexual harassment with the federal government during a 10-month period in 2011. Furthermore, workers of color in restaurant industry are concentrated in the lowest-paid “front and back of the house” occupations such as cooks, dishwashers, bussers, and runners while non-Hispanic whites are disproportionately found in higher paid “front of the house” positions like wait staff and managers.

– Health & Medical Care: Access to affordable basic and preventive healthcare is beyond the reach of many tipped restaurant workers. A 2011 survey of over 4,000 restaurant workers found that 90% did not have access to health insurance through their employer.

Find the Executive Summary here.

Find the full report here.


Working Below The Line

BKD Houston

Behind the Kitchen Door: Extreme Inequality and Opportunity in Houston’s Vibrant Restaurant Economy

Restaurant Opportunities Center of Houston’s latest report is the most comprehensive examination to date of the Houston-area restaurant industry, drawing on 553 worker surveys, 27 structured interviews with restaurant workers and 13 employer interviews, along with other industry and government data. The study offers a vivid picture of the state of the industry and makes recommendations to improve Houston’s economic development, public health and workplace conditions for the city’s restaurant workers.

Houston is America’s fastest-growing city and its vibrant restaurant industry has been called the “most dynamic and diverse food and drink scene in the nation.” However, research indicates that the restaurant workers whose labor makes Houston’s growth possible are being left behind. The majority of restaurant jobs in Houston remain low-road jobs defined by low wages, few benefits, and poor working conditions.

Key findings include:

  • 51% of Houston’s restaurant workers are paid an hourly wage that would not support a family of three above the poverty level. Workers also reported overtime and minimum wage violations, a lack of training, and unsafe workplaces.

  • 51.9% of restaurant workers of color earn below poverty wages, as opposed to 34.3% of white restaurant workers. White workers earn a median wage of $11.82, compared to $8.32 among workers of color.

  • Nearly all (93.1%) of surveyed workers were not offered employer-provided health insurance, and almost two-thirds (61.3%) have no health insurance at all. As a product of not having access to healthcare or paid sick leave, many workers are preparing and handling food while sick.

The report also offers solutions specific to policymakers, employers, customers, and workers, including:

  • For workers: Policy makers should support legislation that ensures workers have access to paid sick days, increase the minimum wage, and raise the subminimum wage for tipped workers to match the overall minimum wage. They should also support job-training programs, ensure that restaurant workers and their families have affordable access to healthcare, and protect workers from erratic scheduling and violations of federal, state, and local anti-discrimination and equal employment opportunity laws.

  • For employers: Adopt systematic and fair hiring and promotions practices — including anti-discrimination and harassment policies — and enhance job quality and employee retention by increasing wages and developing scheduling practices that meet both employer and worker needs.

  • For customers: Support responsible restaurant owners who provide fair wages, benefits, and opportunities for workers to advance.Speak to employers every time you eat out and let them know you care about livable wages, benefits, and opportunities for women and people of color to advance in the restaurant industry.

Find the full report here.

BKD report pic

Behind the Kitchen Door: The Highs and Lows of Seattle’s Booming Restaurant Economy

Restaurant Opportunities Center of Seattle’s latest report is the most comprehensive examination to date of the Seattle-area restaurant industry. The report draws on 524 worker surveys and 15 structured interviews with restaurant workers in King County, along with other industry and government data. It offers a vivid portrait of the state of the industry, and makes recommendations that will improve Seattle’s economic development, public health, as well as workplace conditions for the city’s restaurant workers.

Our research demonstrates that although the industry holds great potential in the wake of positive steps taken by legislators and high-road employers, major areas for improvement remain. Many restaurant jobs in the Seattle area are low-road jobs characterized by few benefits, low wages, and poor workplace conditions. Our report also unearths a range of serious problems related to the availability of benefits, hiring and promotion practices, workplace discrimination, and job-specific training opportunities.

Key findings include:

  • Despite promising steps to ensure higher wages, far too many low-wage restaurant employees are still not feeling the effects; 42.7% reported earning poverty wages. And despite a law requiring paid sick leave, only 37.4% of restaurant workers in Seattle are aware of the law and 73.5% report that they don’t have access to paid sick leave.

  • The vast majority of Seattle’s restaurant workers do not receive workplace benefits such as employer-provided health coverage (87.7%). In fact, 28.4% do not have any form of health insurance coverage at all, and 11.4% report having gone to the emergency room without being able to pay in the past year.

  • Seattle’s restaurant industry is anything but a level playing field for people of color and women. 56.7% of Asian workers, 59.8% of Black workers, and 77.4% of Latino workers worked in the Back of the House, compared to 47.8% of white workers. Furthermore, 38% of Front-of-the-House positions are occupied by workers of color, compared to 57.3% of Back-of-the-House positions. Women make up 22.6% of fine dining positions, compared to 57.2% of casual full-service restaurant occupations.

The report also offers possible solutions specific to policymakers, employers, customers, and workers, including:

  • For workers: Policymakers must strengthen and enforce employment laws in the restaurant industry that raise the tipped minimum wage, provide affordable access to health care, and protect workers from discrimination, harassment, and erratic scheduling. Policymakers should also increase awareness and understanding of those laws, support job training programs, and publicly support collective organizing among restaurant workers.

  • For employers: Adopt systematic and fair hiring, promotions, and scheduling practices, increase wages, and clearly communicate to workers about their benefits, as well as anti-discrimination and anti-harassment policies and procedures.

  • For customers: Support responsible restaurant owners who provide fair wages, benefits, and opportunities for workers to advance, and speak to employers every time you eat out and let them know you care about livable wages, benefits, and opportunities for women and people of color to advance in the restaurant industry.

Seattle has made tremendous strides toward improving working conditions for low-wage workers by enacting laws that require employers to offer paid leave, setting limits on the use of conviction and arrest records in hiring, and raising the minimum wage towards a living wage. However, there is clearly far more work to be done. We hope this report can help guide employers toward the High Road of sustainability, and legislators toward policies that ensure dignity and fairness for the city’s restaurant workers. ROC-Seattle stands ready and willing to act as a resource through every step of that process.

Find the full report here. 

Jim Crow report

Ending Jim Crow in America’s Restaurants: Racial and Gender Occupational Segregation in the Restaurant Industry

While Jim Crow laws regulated the enforced separation between white and African American patrons in restaurants, today restaurant workers are effectively separated by race and gender by a partition between livable-wage and poverty-wage positions. 

The restaurant industry employs 11 million workers and is one of the fastest growing sectors of the U.S. economy. Despite the industry’s growth, restaurant workers occupy seven of the ten lowest-paid occupations reported by the Bureau of Labor Statistics, and the economic position of workers of color in the restaurant industry is particularly precarious. Restaurant workers experience poverty at nearly three times the rate of workers overall, and workers of color experience poverty at nearly twice the rate of white restaurant workers.

By focusing on the state with the largest restaurant industry, California, which includes several cities that are repeatedly named among the top dining destinations nationwide and one of the most diverse populations of any state in the country, the findings in this report have national significance.

Based on government data analysis, a limited pool of employer interviews, and interviews with experts, the initial findings explored in this report suggest the need for further research to more deeply understand the restaurant industry’s occupational segregation problem and how to address it.

Key findings include:

-The greatest racial and gender wage inequality is in the highest wage occupational categories—namely fine-dining server and bartender positions. The restaurants with the highest wages and greatest number of employees had the highest rates of segregation in both Front-of-the-House service positions and Back-of-the-House kitchen positions.

– Worker interviews point to real structural barriers that workers of color face in accessing livable-wage fine-dining service positions, including lack of training, social networks, transportation, childcare, interactions with the criminal justice system, and more. Those real barriers result in employers lacking pools of candidates of color for hiring into fine-dining service positions.

- In California, Latinos experience the highest levels of directly observable occupational segregation, with substantial under-representation in the higher-paying server and bartender occupations, while African Americans are largely absent altogether from meaningful participation in full-service restaurant occupations and overrepresented in limited-service/fast-food occupations.  

- As a result of this segregation, overall after adjusting for education and language proficiency, workers of color receive 56% lower earnings when compared to equally qualified white workers. Women of color, on average, earned 71% of what white men earn, amounting to a $4-per-hour wage differential.

- States like California that have higher minimum wages have lower gender and race wage inequality than the national average, but the disparity is still quite high.

Find the full report here.