Dems Eye Elimination Of Tipped Wages — Again
New York Senate Democrats are taking aim at the state’s tipped worker wage — again.
Sen. Alessandra Biaggi, D-Bronx, introduced S.8406 on Friday to eliminate the sub-minimum wage for food service workers, service employees and other miscellaneous industry workers who receive tips. Biaggi’s proposal amends Section 651 of the state Labor Law to add a new subdivision for miscellaneous industry workers.
Currently, New York employers can pay tipped employees below the state minimum wage. But employers can only do so if employees earn enough tips on average to make up the difference.
For more counties, the cash wage for food service employees tips would be $8 an hour starting Dec. 31, 2020, and increase to $9.25 an hour starting Dec. 31, 2021; $10.50 an hour starting Dec. 31, 2022; $11.50 an hour starting Dec. 31, 2023; and $12.50 an hour starting Dec. 31, 2024. Starting Dec. 31, 2025, the cash wage for tipped workers cannot be less than the state’s minimum wage.
The rate escalates more quickly in Nassau, Suffolk and Westchester counties while it starts higher in New York City and escalates more quickly.
For workers classified as miscellaneous industry workers under state law, their wages would have to be no less than $10.35 an hour for high-tip employees and $10.90 an hour for low-tip employees by June 30, 2020. That number would increase to $12.50 an hour for both high-tip and low-tip employees by Dec. 31, 2020, and could never be less than the state’s minimum wage starting Dec. 31, 2022.
“For many years, employers of food service employees have been provided with a credit that reduces the hourly minimum wage paid to employees receiving gratuities. These employers now pay $7.50 per hour to workers, so long as workers receive on average the difference between their reduced minimum wage and the statutory minimum wage in tips,” Biaggi wrote in her legislative justification. “Allowing for the tip credit has created many inequities in food service work. Employees who are not made whole by gratuities face arduous legal processes to recover their owed wages, involving complicated record-keeping and inadequate legal remedies. Reliance on tips has also created an environment where workers are victimized, and in some cases, encouraged to turn a blind eye, to rampant discrimination and sexual harassment by clientele and managers. This results in annual restaurant employee sexual harassment claims to the EEOC at five times the rate of other industries.”
Biaggi said eight states — Alaska, California, Maine, Minnesota, Montana, Nevada, Oregon and Washington — have eliminated their tipped credit and require employees to pay the full minimum wage to employees.
The legislation also codifies wage increases ordered earlier this year by Gov. Andrew Cuomo for nail salon workers, hairdressers, valet parking attendants, tow truck drivers, tour guides and car wash workers, and would eliminate the subminimum wage for those industries by the end of the year. Those orders did not include restaurant workers, many of whom opposed eliminating tips.
“In short, it is time for New York to join other states and improve the working conditions in the restaurant industry by eliminating the sub-minimum wage,” Biaggi said. “Employers would not be prohibited from allowing for restaurant gratuities, but gratuities would no longer make up the difference between wages received from the restaurant and the actual minimum wage. Providing equity and fairness to restaurant workers would help reduce the wage gap and bring New York in line with many of its sister states in workers’ rights and fairness on the job.”