Some restaurant workers say they’d lose money if Cuomo changes tip system

By Samantha Christmann | Published 8:47 a.m. January 8, 2018 | Updated 2 hours ago

Buffalo News 

Tara Hark has worked other jobs – in customer service at a bank and as a preschool teacher – but she always finds her way back to tending bar.

The money is good enough that she’s able to work shorter hours, which allows her to go to school part time and still have time to spend at home with her children. The harder she works, the more she makes, and being rewarded for good service with big tips gives her a sense of agency.

“I like the fact that the customer gets to decide how your service is, based on their firsthand experience, and determine what you deserve for your work, rather than a boss who isn’t there for every customer transaction,” she said.

But if the governor has his way, that could change.

Gov. Andrew M. Cuomo has asked the labor commissioner to look at the possibility of eliminating the state’s tip credit, which would get rid of the lower base wage for tipped workers such as bartenders and servers, and bring it up to the standard rate paid to all minimum wage employees.

He wouldn’t be able to do that unilaterally but, because of a peculiarity in the law, he can appoint a committee to look at the issue and vote as to whether it should happen. He did the same thing in 2015, when he chose a panel including Mayor Byron Brown, which ultimately voted to raise the minimum wage for fast-food workers.

Cuomo says the move would give workers a better living.

“At the end of day, this is a question of basic fairness. In New York, we believe in a fair day’s pay for a fair day’s work and that all workers deserve to be treated with dignity and respect,” Cuomo said in a statement. “There should be no exception to that fairness and decency.”

But tipped workers say the move would result in a pay cut. Restaurant owners say it will greatly increase their payroll costs. And the the New York State Restaurant Association says it will fix a problem that doesn’t exist.

“We are completely opposed,” said Melissa Fleischut, president and CEO of the restaurant trade group. “We feel that it’s a bad policy that’s going to hurt the employees and hurt the industry.”

What will likely happen with the change, Fleischut said, is that restaurants faced with higher costs of business will raise prices and, to ease the customer’s burden of a more expensive meal, will eliminate tipping altogether. Restaurants already have increased prices to deal with increases in the tipped employee minimum wage that went through in 2016, and there’s not much room to do it again without losing customers, she said.

Other unintended consequences would follow, critics warn. With less room in the budget, managers would put fewer servers on the floor to cover more tables. Without the incentive of tips, the quality of service might decrease. Further, businesses in the hospitality industry could have trouble filling hospitality jobs with qualified people, since workers could move to other minimum-wage jobs and earn the same pay for less demanding work.

There’s no guarantee the wage increase would put an end to tipping. It’s possible servers could hang onto their tips as well as the higher wage. Even if that happens, it will increase the wage gap between front-of-the-house workers and back-of-the-house workers, Fleischut said.

But an end to tipping would pose drastic consequences for bartenders and servers, said tipped workers, who often make twice the current minimum wage of $10.40 or more once tips are factored in.

In Taylor Sawyer’s previous job at Tim Hortons, she made about $350 working a 40-hour week as a supervisor. As a waiter and bartender at J.P. Dwyer’s in North Tonawanda, she makes $20 to $25 an hour which allows her to work fewer hours, and has resulted in better grades at school, she said. Though she likes her job and her employer, she said the money is what keeps her in service work.

If it weren’t for the fat tips and the ability to work less, she might work someplace else, like in retail. Target in Amherst closes at 11 p.m., she said. She wouldn’t have to work late at night. She could work mornings or find something from 9 to 5 somewhere.

“I’ve worked minimum wage jobs. This is much better for me,” Sawyer said. “If I couldn’t do this anymore, it would make life very difficult.”

As things stand now, employers supplement the paychecks of workers who don’t earn enough tips to make the standard minimum wage. Employers pay the lower minimum wage if workers earn enough in tips to bring them to the standard wage or more.

Cuomo said the current system leaves workers vulnerable to sexual harassment, and that it disproportionately affects women and people of color because they make up such a large portion of the industry. But Fleischut at the state restaurant association said the workforce in New York State is more diverse than elsewhere, and that the national statistics the governor is drawing from don’t paint an accurate picture of the service industry here.