>Instacart and DoorDash...have figured out a clever way to use customer tips to lower their labor expenses.
Isn't this how restaurants work..?
Isn't this how restaurants work..?
In the restaurant industry, a waiter must be paid the standard minimum wage (for the state/city/etc). However, because tips are expected, the employer is allowed to pay less IF AND ONLY IF the tips make up the difference.
Made up example: State min. wage: $10/hour State adjusted min. for wait staff: $5/hour
Tips per hour: $6/hour Actual pay: $11/hour ($5 adjusted + $6 tips)
Tips per hour: $3/hour Actual pay: $10/hour ($3 tips + $7 pay)
Made up example: Employer-stated hourly rate: $10/hour Tips per hour: $9/hour Actual pay: $10/hour ($9 tips + $1 pay) Tips per hour: $3/hour Actual pay: $10/hour ($3 tips + $7 pay) And in the very extreme case... Tips per hour: $11/hour Actual pay: $11/hour ($11 tips + $0 pay)
By avoiding the minimum wage, and backfilling wages with tips, the employer can theoretically avoid paying ANY wages to employees (and I'm specifically calling them employees here because I believe most of these gig economy jobs should be employees, even if not legally required to do so).