Tip Credit & Tipped Wage Under Attack

As you’ve read and heard in the news, Governor Cuomo has proposed holding statewide hearings to consider eliminating the tip credit. According to the Governor’s original announcement last month, the hearings will determine whether the ability to pay employees less than the minimum wage is resulting in a hardship to these workers. While the announcement says it’s an open question, our expectation is that these hearings will be used to justify eliminating the tip credit and requiring all servers to be paid the full minimum wage. Our fears were not relieved in any way by the recent announcement of the hearing schedule (more details below) in which the Governor uses more strident rhetoric including some of the language used by the advocates of eliminating the tip credit.

The only question is whether the Labor Commissioner will do this administratively or whether the Governor will seek to change the law which will require the engagement of the Assembly and Senate. During the recent battle over the $15 minimum wage the State Labor Law was amended to stipulate that the cash wage for tipped food service workers is two-thirds of the minimum wage. But the provisions of the Labor Law that allows for the Labor Commissioner to enact such a change administratively were not removed from the law leading some to believe the tip credit can be eliminated without legislative action.

That’s a question for the courts – if it comes to it – but for now we need to try to prevent ourselves from landing in that spot. The major groups representing the hospitality industry in New York State have formed a coalition to fight to protect the industry, its workers and businesses from the devastating effects of this proposal. The NYS Restaurant Association, the NYS Hospitality & Tourism Association, the NYS Bowling Proprietors Association, the NYC Hospitality Alliance and our Association are collaborating on our grassroots lobbying and communications activity. We’re all on the same page in this battle. We’ll be sharing a website so there’s one spot for folks to go for information from the industry’s perspective and so we can more easily coordinate our efforts. We’ll provide the website address to you as soon as the page goes live.

One of the keys to our strategy is to focus as much as possible on the benefits to tipped workers of the current system and the possible problems they can experience if the tip credit is eliminated. The advocates of eliminating the tip credit highlight the segment of the tipped foodservice workers industry that make barely above the minimum wage. Tipped workers in full service restaurants, taverns and bars make considerably more than the minimum wage – and we need them to tell the Labor Commissioner to leave the system alone. We also have to counter the image that owners are stealing tips from their workers and that working in the hospitality industry is a sexual harassment nightmare. The testimonials from owners, managers and servers are the best weapons we have.

The hearings will begin in March in Syracuse and conclude at the end of June in New York City. The hearing schedule is as follows:

Monday, March 12, 2018 at 10 a.m.

SUNY College of Environmental Science and Forestry

The Gateway Center, Syracuse

Wednesday, March 21, 2018 at 10 a.m.
Common Council Chamber

City Hall, Buffalo

Friday, April 20, 2018 at 10 a.m. 
Roosevelt Little Theatre

SUNY Farmingdale

Wednesday, April 25, 2018 at 10 a.m.

Dulles State Office Building

317 Washington Street, Watertown

Friday, May 18, 2018 at 10 a.m.
Legislative Office Building, Albany

Week of June 25

New York City, Location TBD

Anyone wishing to testify at one of these hearings must pre-register with the Department of Labor. You can register:

  • Online: www.labor.ny.gov/subminimum
  • Email: [email protected]
  • Phone: 518-457-5519
  • Fax: 518-485-1126
  • Mail: New York State Department of Labor
    ATTN: Subminimum Wage Hearing
    Building 12, Room 588
    Harriman State Office Campus
    Albany, NY 12240

Please sign-up to testify at these hearings and encourage your employees to sign-up to testify as well. The only way to prevent the elimination of the tip credit is to make it clear how damaging it will be and how unpopular it is. We’ll keep you updated on developments as they occur. Watch our website, www.esrta.org, for regular updates.