- A server for the Capital Grille in Washington, D.C., has filed a charge of discrimination with the U.S. Equal Employment Opportunity Commission (EEOC) against Darden Restaurants, the chain's operator, alleging race discrimination. According to the charge, "non-white servers were held to a higher workplace standard than their Caucasian counterparts" and the complainant, who described herself as a Latina woman, said she was "consistently assigned to sections of the restaurant known to generate less in tips." Management referred to the sections as "Section 8" — an apparent reference to the provision of the Fair Housing Act that authorizes housing assistance for individuals with low incomes and a phrase often considered coded language for racism.
- Just a day earlier, One Fair Wage, a national worker advocacy group, also filed a charge of discrimination against Darden Restaurants, alleging that its policy of paying tipped workers a sub-minimum wage causes them to suffer more sexual harassment than non-tipped workers and leads to non-white workers earning less in tips than their White co-workers.
- A Darden spokesperson called the allegations "baseless" in a statement, adding that "Darden is a values-based company built on a culture of integrity and fairness, respect and caring, and a longstanding commitment to diversity and inclusion."
The Fair Labor Standards Act (FLSA) allows an employer to take a tip credit toward its minimum wage obligation for tipped employees equal to the difference between the required cash wage (which must be at least $2.13 under federal law) and the federal minimum wage of $7.25.
Some states, however, have moved in to make changes. New York, for example, will eliminate the tipped wage in several industries effective Dec. 31, according to an announcement from the governor's office. The change is expected to affect more than 70,000 workers in a variety of jobs such as nail and hair salon workers, aestheticians, car wash workers, valets, door-persons, dog groomers, tour guides and tow truck drivers.
While employers are expected to make up the difference if tips do not amount to minimum wage, cracks exist and many employees fall through, Restaurant Dive has reported. For example, restaurants may not properly or consistently track employee tips. Legal action over such issues has accelerated in recent years, the Wall Street Journal reported.
In addition, workers’ rights groups are advocating for the abolishment of the so-called two-tiered wage model, claiming tipped workers face higher rates of poverty and harassment. But industry groups and restaurant companies have fought the move because of concerns about higher labor costs and the disproportionate effects on small and independent businesses.
Democractic Presidential candidate Joe Biden last month reaffirmed his plan to back a $15 federal minimum wage and end the tipped minimum wage. He also said he supports an end to the subminimum wage for workers with disabilities.