Las Cruces Business Owners Advocate For Decrease In Hourly Wages Of Tipped Workers

Sep 22, 2020

Las Cruces business owners advocated for the hourly wage of tipped workers to be decreased during Tuesday’s city council work session. 

“Every person in this community needs to have a job, and in order for them to have those jobs, we must have businesses open in order to employ them,” Marci Dickerson, restaurant owner, said.

Dickerson is imploring the city council to consider decreasing the minimum wage of tipped workers.

The city has the option to temporarily decrease their hourly wage from the current $4.10 an hour to the state minimum requirement, a little over two dollars. If these employees make less than the city’s standard minimum wage in tips, employers will still be required to make up the difference.

Dickerson believes a reduction will help small businesses recover from the pandemic.

“We are on a serious crisis threshold, that there are so many of these smaller mom-and-pop restaurants, little restaurants, really struggling to stay open, and this possibly could provide that little bit of relief that they need,” Dickerson said.  

The city council met to hear the concerns business owners have on the issue, with the number of participants being limited to 20 by the city. While the council had hoped to hear from those on both sides, all those who spoke at the meeting were in support of the reduction.

It didn’t stop many members on the council from voicing their concerns about the decrease.  

Councilwoman Johana Bencomo mentioned she’d spoken with tipped workers in her district who were living in fear of what catching the virus would mean for their financial health.

“What I hear from people is, ‘Every single day I go to work, in the back of my mind, I'm thinking, what if this is the day I get sick? What if this is the day I get COVID? How am I going to pay for those bills? Because sure, maybe I'm making some good tips. But I'm not making enough to pay for health care to pay for my medical bills,’” Bencomo said.

Dickerson argued employees will not be largely impacted because a large portion of hourly wages go toward tax liability.  She said once taxes are taken out, most of her employees don’t even bother to pick up their paycheck due to its small size.

“So you have to pay taxes on your tips, just like you do your hourly wage,” Dickerson said.  “The tax liability then is paid out of the hourly wages. The reason I'm explaining this is most servers, and I've talked to several restaurants in town, most servers do not actually get a paycheck on paper, they get a $1 paycheck or a zero paycheck, depending on how the accounting works. But [for] most servers, their tax liability for the income they earn every day is paid for by those paychecks.”

Jerry Silva, the owner of Save Mart grocery in Las Cruces, told the council about the struggles he has witnessed during the pandemic.

“They're having to lay people off, and that's kind of working against what we all want to do in the first place,” Silva said. “I've had people coming to me trying to find anything they can, and I've been employing as many as I can.”

Dickerson suggested other relief could come in the form of help with utilities, something Mayor Ken Miyagishima seemed interested in looking into with the help of city attorneys.

Mayor Pro Tem Kasandra Gandara reminded those in attendance about relief efforts already underway, including the city’s utility support fund and the over 5 million dollars in small business grant money Las Cruces received from the state.

“We put forth a lot of money into that utility fund not just once, but twice for this very thing. For folks and businesses that are struggling to pay that,” Gandara said. “And we didn't just do something early on. In terms of [the] economic department and helping businesses, it's been ongoing. And now with...the monies that we are receiving from the state, it'll be some additional help, up to $10,000.”

While the council took no official action, many, including Councilman Gabe Vasquez, made their stance on the issue clear.

“For me, personally, I can't separate helping businesses without helping the workers. I think that has to come hand in hand. I think a healthy business has a healthy workforce as well,” Vasquez said.