In response to recent proposed legislation to change Rhode Island’s tip credit system, CorCom, Inc. undertook a comprehensive survey of the state’s tipped hospitality workers across a broad and diverse cross section of the industry. The results, recently unveiled by the RI Hospitality Association, unequivocally show that the current system is not only preferred, but is critical for the financial well-being and job satisfaction of our workforce.
The federal tip credit system has long been a cornerstone of the hospitality industry, allowing tipped employees such as restaurant servers and bartenders to earn a base hourly wage below the state minimum, with the understanding that tips will supplement their income. This arrangement ensures that every employee earns at least the minimum wage, and often significantly more, rewarding those who excel in their roles and who provide outstanding service to customers. The proposed legislation, House Bill 7531, seeks to overhaul this practice, without fully considering the detrimental impact it could have on those it purports to help.
The RIHA survey, conducted in early 2024, drew responses from 244 tipped employees across Rhode Island, providing us with critical insights into the sentiment within our industry. A staggering 91% of these employees have expressed a desire to maintain the current tip credit system, citing the significant earning potential it affords them. This preference is not limited to a small subset of our workforce; it spans across genders, ethnicities, and years of service, demonstrating the system’s effectiveness and importance to a broad demographic within the hospitality sector.
Notably, 85% of the surveyed employees reported earning $20 per hour or more, a figure that far exceeds Rhode Island’s current minimum wage. This statistic is a testament to the success of the tip credit system in enabling higher earning potential for our workers. It’s a system that motivates and rewards excellence, pushing employees to strive to provide the best service possible, directly benefiting both our customers and the financial stability of our workforce.
The survey also highlighted valid concerns about the potential repercussions of eliminating the tip credit system. An overwhelming 87% of respondents feared that their earnings would decrease should this proposal pass, with 70% skeptical that customers would continue to tip generously on top of mandatory service charges. This change threatens not only the financial stability of our employees, but also the very culture of hospitality and service that Rhode Island prides itself on.
I stand with the vast majority of our state’s hospitality workers in opposing the proposed changes to our tip credit system. Our industry thrives because of the diverse, dedicated workforce that serves residents and visitors alike, contributing significantly to our state’s economy. It’s crucial that we listen to their voices and understand the real-world implications of these legislative changes. Instead of dismantling a system that has proven effective for both employees and employers, we should focus on supporting policies that enhance the hospitality industry’s ability to provide rewarding, well-paying jobs to Rhode Islanders.
Let’s not make hasty decisions that could inadvertently harm the very individuals we aim to support. The tip credit system represents a balanced, effective approach to compensating our state’s hospitality workers, ensuring that they are rewarded for their hard work and service excellence. I urge lawmakers and stakeholders to consider the findings of the RIHA survey and work towards solutions that truly benefit our state’s vibrant hospitality sector and its workforce.
