Press Release
Statement on State Wage Board Recommendations for Tipped Workers
David R. Jones
Contact: Jeff Maclin
(212) 614-5538 (office)
(718) 309-2346 (cell)
jmaclin@cssny.org
On Friday, the New York State Wage Board appointed by Gov. Cuomo offered its recommendations for changes to state law governing the minimum wage for tipped workers. Currently, the tipped minimum wage for food service workers is $5.00 an hour – just 57 percent of the statewide minimum wage – and $5.65 an hour for service employees. A recent Community Service Society (CSS) report found that tipped workers in New York are more than twice as likely to live in poverty as non-tipped workers and are more reliant on public benefits like food stamps and Medicaid.
We are therefore pleased with many of the Board’s recommendations that seek to increase the tipped minimum wage, and potentially do away with the tip credit system altogether. The board recommended consolidating various tipped occupations into one category and that the minimum wage for these workers be increased to $7.50 an hour. The Board also recommended an increase in the tipped minimum wage to $8.50 an hour in New York City should the overall minimum wage for New York City increase separately from the rest of the state.
We are also pleased with the recommendation that the State conduct a review as to whether or not the state should eliminate the tipped minimum wage and have one minimum wage for all workers. Seven states do not have a separate minimum wage for tipped workers, and we feel that New York should be next in line to do so. CSS polling data from its annual Unheard Third survey shows that the vast majority of New York City residents agree. Eight out of ten New Yorkers favor raising the tipped minimum wage so it is equal to the overall minimum wage, including two-thirds who are strongly in favor. Support is strong among both low and high-income New Yorkers, and both Democrats and Republicans.
We were disappointed with the Board’s final recommendation that workers who earn 120 percent of the minimum wage statewide, and 150 percent of the minimum wage in New York City, when including tips be governed by a different set of laws that allow employers to take an extra $1 tip credit, effectively reducing the minimum wage for these workers to $6.50 an hour. A major problem with the current tip credit system is that it is far too complex – for both employers and employees – making compliance and enforcement incredibly difficult. This recommendation from the Wage Board would inject a dose of unnecessary complexity into a system that needs to be made simpler. We are very supportive of the recommendations that pave the path to a simpler system in which tipped employees work under the same minimum wage as all other workers. Unfortunately, the Board’s final recommendation is a step in the wrong direction, and we urge State Department of Labor Commissioner Mario Musolino and Governor Cuomo to reject it.