ALBANY – The state Labor Department held seven hearings, received more than 40 hours of testimony and accepted hundreds of written comments on whether it should end the separate wage for waiters and other workers who rely on tips.
Now the state will decide whether to end the tipped wage and provide workers the full minimum wage — a proposal being opposed by businesses and some in the industry.
The fear is that workers would receive lower tips if the state provides them with the full minimum wage — which ranges from $10.40 an hour upstate to as high as $13 an hour in New York City.
The current tipped wage is $7.50 an hour outside New York City and $8.65 an hour for employers with more than 11 workers in the city.
“The Department of Labor wants to thank all of the passionate advocates for coming to the hearings and sharing their stories,” said Jill Aurora, the department’s spokeswoman.
“All of this information will help the department formulate its recommendations on how to move forward.”
The hearings ended last month, and the deadline for written testimony ended July 1.
Is the tipped wage end near?
Aurora said there was no immediate timeline when the Labor Department will make its recommendations to Gov. Andrew Cuomo on whether to end the tipped wage.
“With the volume of materials to be analyzed, it is too soon in the process to discuss any sort of timeline for the release of the recommendations or their implementation,” she said.
Cuomo, a Democrat, is up for re-election this year and is facing pressure to not change the current wage structure from business owners and groups that represent restaurants — both the workers and the employers.
The New York City Hospitality Alliance and other statewide groups held a rally in Manhattan on June 27 urging Cuomo and the labor department scrap the proposal.
“Eliminating the tip credit will hurt restaurants that operate on thin profit margins and significantly reduce workers’ take-home pay when customers tip less due to much higher menu prices, and when restaurants eliminate tipping,” the groups said.
They also pointed to Maine — where voters in 2016 ended the tipped wage, only for the state Legislature to restore it a year later after workers said they were getting fewer tips.
“The employees who will be directly impacted by this change do not want it. That is clear by the outcry we have heard from across the state,” Heather Briccetti, president of the state Business Council, said in May.
In an op-ed Monday in the New York Daily News, Republican gubernatorial candidate Marc Molinaro urged the state to drop plans to end the tipped wage.
He held a press conference Monday at City Hall in Manhattan to oppose the proposal, accusing Cuomo of possibly bowing to some unions who want the change.
“If these are the people Cuomo wants to impress, he can knock himself out,” Molinaro, the Dutchess County executive, wrote.
“But maybe he should do it without knocking New York eateries and their servers out of business at the same time.”
Cuomo’s campaign spokeswoman Abbey Collins called Molinaro a “Trump acolyte.”
“The difference couldn’t be more stark,” Collins said.
“Governor Cuomo stands on the side or hardworking men and women across this state, while Molinaro continues his attack on the working and middle class.”
Cynthia Nixon, Cuomo’s Democratic primary opponent, said she understands the concerns of workers, but supports the “One Fair Wage” campaign while also pledging to work with businesses to address their concerns.
“Ultimately, no one should be dependent on the whims of customers in order to take care of themselves and their families — especially considering that many diners don’t understand that the current system essentially makes tipping an obligation, not an option,” Nixon said in a statement.
Why the proposal?
In January, Cuomo announced the hearings and the review of whether to end the tipped wage, saying there has been concerns in the industry about some workers being underpaid and mistreated.
The issue can be that some tipped employees, such as those who work in nail salons and carwash shops, get paid the tipped wage, but don’t make enough in tips to meet the current minimum wage.
Employers are supposed to make up the difference, but sometimes do not, advocates of the change said.
“New York continues to be a national leader in fighting for justice for working men and women, and by providing a platform for New Yorkers’ concerns to be heard, we are furthering our efforts to deliver fair wages for all,” Cuomo said in January.
A group of unions and workers called One Fair Wage want New York to end the tipped wage, saying employees can often be exploited under it.
It said seven states already pay tipped workers a basic minimum wage.
Wages on the rise
Supporters said ending the tipped wage would be the next step toward a $15 minimum wage in New York.
For workers who do not receive tips, the minimum wage will hit $15 an hour by year’s end for employers who have more than 11 workers in New York City.
It will reach $12.50 an hour outside the metropolitan area by the end of 2020, and $15 an hour in Westchester and on Long Island by the end of 2021.
For fast-food workers, they are on a separate pay scale: Their minimum wage will rise to $15 an hour statewide on July 1, 2021.
As for the tipped wage, it is set to hit $10 an hour by the end of 2018 for New York City employers with more than 11 workers.
It will go to $8 an hour at year’s end on Long Island and in Westchester.
By the end of 2020, the tipped wage will be $9.35 on Long Island and Westchester and $8.35 an hour outside the metropolitan area.
That is, of course, if the state doesn’t end the tipped wage altogether by then — as supporters of the change hope.
“New York led the nation by passing a $15 an hour minimum wage. However, 400,000 tipped workers were left out of this victory,” said Deborah Axt, co-executive director of Make the Road New York, an immigrants’ rights group.
“For far too long, the so-called tip credit has kept restaurant, carwash, and nail salon workers in poverty and exacerbated the wage theft and exploitation that is all too common in these industries.”