Tips remain focus of Portland minimum-wage debate

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PORTLAND — Discussions revolved around tipped-wage workers when the City Council Finance Committee held its first review of Mayor Michael Brennan’s plan to institute a citywide minimum wage.

Committee Chairman Councilor Nick Mavodones Jr. and Councilor Ed Suslovic were the only committee members to attend Thursday, Nov. 20, as Brennan and city Corporation Counsel Danielle West-Chuhta reviewed a draft ordinance for a minimum wage of $9.50 per hour starting July 1, 2015.

The ordinance would affect all employees working in the city, including municipal staff. The wage would be increased to $10.10 per hour on Jan. 1, 2016, and $10.68 per hour on Jan. 1, 2017. Beyond that, increases would be pegged to increases in the Consumer Price Index  measurements for urban areas.

While the lack of a quorum prevented the committee from taking any action, Mavodones accepted 35 minutes of public comment and said the committee will take more comments when it takes up the ordinance again at its Dec. 11 meeting.

As in many of the meetings Brennan’s Minimum Wage Committee held through the spring and summer, the primary concerns were expressed by restaurant owners and trade group representatives about how the minimum wage will be applied to employees who depend on tips.

The minimum wage in Maine is $7.50 per hour, and employers are allowed to pay half that to workers earning at least $30 a month in tips. The law requires employers to make up the difference when the full minimum wage is not earned, and Brennan said it is his intent to keep the state tipped wage intact while ensuring tipped workers would be paid the citywide minimum when they do not earn it in tips.

The devil may be in the ordinance details, said Greg Dugal, president and CEO of the Maine Restaurant Association.

“We still obviously find conflict with this,” Dugal said, adding he feels increasing the minimum wage is a state or federal issue.

Dugal said the ordinance could be viewed as requiring the tipped wage to be 50 percent of the city wage, an onerous increase to bear, he said. A $2 per hour increase in the tipped wage could cost a business owner employing 10 tipped wage earners $30,000 a year.

Steve DiMillo, owner of DiMillo’s on the Water on Long Wharf, said he calculated the increase Dugal feared would cost him $140,000 annually, based on the 70,000 hours his tipped staff work.

“I don’t know where it is going to come from,” DiMillo said. “How we can increase prices to offset this, I don’t know.”

Conversely, Drew Joy, of the Southern Maine Worker’s Center, criticized the ordinance for not increasing wages enough and excluding workers under 18.

“Workers do not have to magically provide for themselves when they turn 18,” he said. “Students are not people who don’t need money.”

West-Chuhta said her research indicates the city could enact a minimum wage based on home rule provisions in the state Constitution, but that would not mean the law would go unchallenged in court. Her office would be in charge of investigating violations, but Brennan said Portland’s size should not make enforcement difficult.

Brennan set a goal of creating a citywide minimum wage last January, and the committee of academics, labor leaders and business and nonprofit representatives began meeting in April.

Determining how many people earn the minimum wage in the city has proved elusive. Census data from 2010 shows there are about 22,000 people living and working in the city, but extrapolating deeper numbers on those earning $15,000 or less is skewed because some could be retired or working part-time, Brennan noted.

Specific data on the number of workers earning below $9.50 per hour is also hard to find; Brennan said Portland Regional Chamber CEO Chris Hall’s research indicated member businesses are all paying above the minimum wage.

A spring survey by Portland Buy Local, which has about 480 members and got about 65 responses, showed 61 percent of responding members paid wages above $10 per hour. Portland Buy Local has taken no stance on the minimum wage issue.

Becky Rand, owner of Becky’s Diner on Commercial Street, said she also pays non-tipped wage employees more than the minimum wage because it attracts and keeps staff. But she and Dugal said increasing the minimum wage so significantly could create “wage creep” and reduce business profitability.

Joy saw that as a benefit. “I think we should be in favor of wage creep,” he said.

It was not until Mavodones wrapped up the committee discussion that Brennan could more fully explain his intentions regarding how to apply the tipped wage.

“It has never been part of our intent,” he told Dugal, DiMillo, Chris Jones of the Maine Restaurants Association, and Curtis Picard of the Maine Retail Association in the hall outside Room 209 in City Hall. “We are following state law at $3.75.”

His words placated DiMillo, but Dugal said the current draft could still be interpreted in a manner that would be expensive to city restaurant owners.

David Harry can be reached at 781-3661 ext. 110 or Follow him on Twitter: @DavidHarry8.

Sidebar Elements

Finance panel delays storm water fee recommendation

PORTLAND — With Councilors Jill Duson and David Marshall unable to attend the Thursday, Nov. 20, City Council Finance Committee meeting, no recommendation was made on a proposed fee to pay for storm water infrastructure upgrades.

The committee may make its recommendation at the scheduled Dec. 11 meeting.

The plan to help fund an estimated $70 million of upgrades needed by 2030 to bring the city into compliance with state and federal environmental laws would cost property owners a monthly fee of $6 per 1,200 square foot of impervious surface.

The fee would be assessed on all public and private properties, excluding those under 400 square feet or on Casco Bay Islands aside from Peaks Island.

The Finance Committee, with Councilor Nick Mavodones Jr. as chairman, held two public hearings on the fee plan, which could go into effect Jan. 1, 2016. The new fee would be accompanied by a $1.50-per-hundred-cubic-feet reduction in sewer rates charged by the Portland Water District.

— David Harry

Portland City Hall reporter for The Forecaster. Baltimore native, lived in Maine since 1989. A journalist since 2005, covering much of Cumberland and York counties. I joined The Forecaster in 2012.