In a preview of Cuomo's 2018 State of the State speech, Cuomo wants to evaluate and possibly end minimum wage tip credits in New York. The governor says allowing a lower base rate disproportionately targets women and people of color since 70% of tipped workers in New York are women.
ROCHESTER—New Yorkers who work for tips could be in for a raise. Gov. Andrew Cuomo wants to evaluate and possibly end minimum wage tip credits in New York. Cuomo has ordered the state Department of Labor to hold public hearings next year to hear from workers and employers on the tipped wages credit, which allows owners of businesses such as restaurants, car washes and nail salons to pay workers less than the legal minimum wage.
Cuomo unveiled the proposal in a preview of his 2018 State of the State speech. Currently, wait staff, car wash attendants, and nail salon workers can be paid $7.50 per hour, which is $1.50 less than the state minimum wage. The governor says tips are meant to be a reward for good service-not a wage subsidy. Allowing a lower base rate, the Governor says, disproportionately affects women and people of color since 70% of tipped workers in New York are women.
According to a 2014 study by the Restaurant Opportunities Center, tipping practices have been linked to higher rates of sexual harassment. Tipped workers often report not being willing to come forward because they are reliant on their employers for shift scheduling, with certain shifts generally tipping more than others.
Max Gordon bought and remodeled The Hideaway along Park Avenue about 8 months ago. So far, business has been good, he’s been able to expand and hire more employees but he’s concerned about the Governor’s proposal.
“I'm all for a fair wage and I think as the cost of living increases, you need to make it fair across the board but when servers are making tips, that's what they rely on and unfortunately, if minimum wage goes up, someone has to pay the price and being a small business owner, the margins aren't there,” he says. Meaning, the money would have to be made up in some fashion, “that additional cost would definitely hurt the expansion process of everything and remodeling and things that we want to do to help the customer experience and then that would have to be put on the customer's plate,” Gordon said.
So, it could translate into higher food prices for customers but there’s another issue.
"When their wages increase then I have to decide whether an additional server is worth it, so that hurts service, it eliminates jobs and makes everyone a little crazier,” Gordon said.
Parker Allen is a server and a bartender in Rochester. Allen says he didn’t consider the base pay when he took the job.
“Not much, not really. I mean tips are really where we make all our money, the vast majority of it. Honestly, I'd like to make extra money, of course, it's great to make extra money but honestly where I don't think it's fair is for the guys in the kitchen because they don't get tipped, and they're already working very hard for pretty for pretty much the same money I'd be making and I don't feel that's very fair,” Allen said.
The Department of Labor will hold public hearings to get input from workers, businesses and others. As soon as we have information on when and where those will be, we will pass it along.