Waffle House will raise wages for tipped workers amid labor advocacy efforts

A Waffle House restaurant sits closed after the restaurant chain closed at least 420 locations due to the COVID-19 crisis on March 26, 2020 in Thornton, Colorado.

The famed Waffle House fast-food franchise is increasing wages for its workforce of more than 40,000 employees. This move comes after a persistent year-long push from labor groups.

CEO Joe Rogers III, addressing Waffle House employees in a video, announced the chain is elevating its base pay to a minimum of $3 per hour starting this month. The company plans to incrementally raise its base hourly rate to $5.25 by June 2026. Rogers stated Waffle House is also rolling out wage boosts via tenure bonuses and shift premiums over the coming two to three years. Higher menu prices will pay for the wage increases, Rogers explained.

These wage adjustments come after more than a year of public campaigning by The Union of Southern Service Workers, a labor group that advocates for low-wage service workers. The group applied pressure on Waffle House through strikes, letters, and petitions. 

The Union of Southern Service Workers continues to campaign for a $25 hourly wage, 24/7 security for employees, and eliminating mandatory meal deductions. In March, the group filed a petition to the Labor Department requesting an investigation into the policy of deducting the cost of mandatory meals from employees' paychecks.

The wage hike marks a significant new phase in Waffle House’s history. As Rogers put it, "This is the single largest additional investment in our workforce in the entire 68-year history of Waffle House." 

Every single employee at the nearly 2,000 Waffle House locations will benefit from the upcoming wage hikes, Rogers emphasized. The chain is adjusting its wage policies in an effort to standardize base hourly rates. However, as base pay does not include tips, wages will vary by state depending on the local minimum wage laws. Additionally, wages will rise more slowly in some rural markets than in urban areas.

Wage laws in several states, particularly in the South, allow employers to pay service workers hourly rates well below the federal minimum wage. The service industry often meets minimum wage requirements by combining the base wage with customer tips. If reported tips do not reach the minimum wage, the employer is required to. If reported tips fall short of the minimum wage, the employer must make up the difference.

Service and restaurant workers are often dependent on tips for a significant part of their income. According to the latest data from the Internal Revenue Service, workers received more than $38 billion in tips in the 2018 tax year. Tipped workers averaged an additional $6,000 for their base wages in 2018.

Rodgers acknowledged the significance of the wage hikes given the critical reliance on tips for service workers. "This is a big deal, a massive additional investment," he said in the video addressing Waffle House employees. "And I don’t see many others in our industry doing things like this."

 Since Waffle House’s inception in 1955 in Georgia, the diner-style restaurant chain has expanded to at least 26 states, mostly in the South and Midwest. All Waffle House restaurants are open 24-hours a day, seven days a week.