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Retailing And Restaurants

News Journal article about lawsuit maligned entire restaurant industry

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By Carrie Leishman

Delaware Restaurant Association & Delaware Restaurant Association Educational Foundation

A Sept. 26 News Journal article presumably intended to inform readers about a lawsuit brought to a single restaurant by the Delaware Department of Labor, but instead succeeded in painting a biased picture of tipped employees and the restaurant community that provide employment and career opportunities.  The news report largely ignored opinions of tipped earners in favor of the noise of a handful of labor union-backed activists.   

The practice of tipping is fundamentally engrained in our American culture and this spirit of service and hospitality is what makes the restaurant industry an industry of choice for almost 50,000 Delawareans.  To state that restaurant workers earn a “sub-minimum” wage is categorically false. Tips are wages that both employers and employees pay taxes on.  By law each employee in Delaware must earn at least the minimum wage of $8.25 an hour, and it is the responsibility of the employer to make sure each employee makes at least the minimum wage from a combination of wages and tips. No one is making $2.23 an hour in Delaware — period! In fact, servers and bartenders earn tips (in addition to their paid wages) that often make them some of the highest earners within a restaurant.  In practice, this system is not “dysfunctional” as the article portrays it. In self-reported earnings alone, Census Bureau data shows servers and bartenders collect up to $25 an hour or more.  Insinuating that the restaurant industry circumvents the law, keeps tips for themselves, practices “wage-theft” as well as harming “women and people of color” is simply false.

Ninety percent of restaurants are independent or franchise-owned.  Each local business operates on razor-thin profit margins of 3 percent to 6 percent.  They are critical employers in Delaware who offer essential opportunities to all — including women, teenagers and minorities from all backgrounds who value the flexible hours and valuable skills leading toward career paths without limitations.  Encouraging diversity, restaurants advance women’s careers and not just because they are “attractive or flirtatious” as the article suggests.  According to the National Restaurant Association, 61 percent of women have worked in the restaurant industry, 45 percent of restaurant managers are women, and more than half of U.S. restaurants are owned or co-owned by women. The most telling statistic is the fact that 92 percent of women who have worked in restaurants say the industry is a good place to get a first job and learn valuable skills.

Instead of devaluing restaurants and attacking small businesses, let’s focus on the facts: restaurants continue to create jobs and provide real opportunity to young people, women and minorities of all skill levels looking to step into the work force as well as those who are seeking to find their economic footing that will put them on the pathway to middle-class careers. More than virtually any other industry in Delaware, the restaurant industry provides career choices and upward mobility that is simply not possible in other fields. We are truly an industry of opportunity that values and promotes our employees, and recognizes the crucial role they play in our local economy.

Carrie Leishman is president and CEO of the Delaware Restaurant Association & Delaware Restaurant Association Educational Foundation. Her organization represents 2,000 restaurants, which employ nearly 50,000  people and exceed $1.2 billion in annual sales.

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