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Minimum Wage Increase Adopted – Tipped Wage Adjusted

The State Legislature approved an increase in the state minimum wage today. The minimum wage will increase to $15 per hour in NYC by 12/31/18 except for small businesses with 10 employees or less who will see minimum wage increase to $15 per hour by 12/31/19. In Nassau, Suffolk and Westchester Counties the minimum wage will increase to $15 per hour by 12/31/21.

In upstate New York, the minimum wage will increase to $12.50 per hour by 12/31/20 after which the minimum wage will increase to $15 per hour over a period of time based on an index designed to measure the strength of the upstate economy. It could go up quickly or slowly depending on economic conditions.

The new minimum wage law includes an adjustment in the cash wage for tipped food service workers. The law sets the cash wage at two-thirds the rate of the minimum wage. This is the historical relationship the cash wage has had to the minimum wage for the past thirty years – until the wage board acted last year. This means that as the minimum wage increases over the next few years the cash wage will also increase so that it’s always two-thirds of the minimum wage. The cash wage will eventually get up to $10 per hour when the minimum wage in each region gets to $15 per hour.

To understand the impact of this on the cash wage for tipped food service workers, the final budget results in a one year freeze in the cash wage for employers in NYC and a two year freeze for employers in Nassau, Suffolk and Westchester counties. Employers in the rest of the state will have a freeze in the cash wage for four years (see the attached chart for more information).

Getting the cash wage rate set at two-thirds of the minimum wage is a great victory. It’s the way it’s been for the past 30 years so it’s fair to maintain it going forward. And it was set by the state legislature not an appointed body. This could not be achieved without the grassroots efforts of our members and the entire hospitality industry. While this will cause an increase in your operational costs, it’s a far better deal than the wage board or the deal struck in in California this week.