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Tipped workers fare better across SD border

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news Mitchell, 57301
Mitchell South Dakota 120 South Lawler 57301

What’s the difference between working as wait staff at a cafe in Big Stone City, or just across the lake in a cafe in Ortonville, Minn.?

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About $5.12 an hour.

According to a new report by the Economic Policy Institute, discrepancies like this are rampant in the food service industry in the United States.

In the example above, under South Dakota law, an employer only has to pay a tipped employee $2.13 an hour. In Minnesota, the employer needs to pay the state minimum wage of $7.25 an hour to a tipped employee.

The variation continues across the Northern Plains.

• Iowa: $7.25/hour minimum wage for non-tipped employees, $4.35/hour minimum wage for tipped employees.

• Montana: $7.90/hour minimum wage for non-tipped employees, same for tipped employees.

• Nebraska and Wyoming: $7.25/hour minimum wage for non-tipped employees, $2.13 for tipped employees.

• North Dakota: $7.25/ hour minimum wage for non-tipped employees, $4.86 for tipped employees.

The study also found that 46 percent of all tipped workers nationally were on some form of federal assistance versus 35.5 percent for non-tipped workers.

The $2.13 federal tipped minimum wage has been in place since 1991. In 1996, according to the institute, it was uncoupled from the federal minimum wage.

In 1991, the tipped minimum wage was 50 percent of the non-tipped minimum wage. Today, according to the group, it is on average 29.4 percent of the federal minimum wage of $7.25/ hour.

The institute also found that tipped workers receive fewer benefits like vacation pay, sick leave and health care than non-tipped workers.

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