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NYC Litigation Blog

Wednesday, August 15, 2018

New York to Decide Whether Tipped Wages Should End

If NY eliminates the tipped wage, how much will tipped employees make per hour?

The state of New York is set to make an important decision for employers and employees across the state. At issue is whether tipped wages should be abolished in New York, with workers instead paid the full minimum wage. The state Labor Department heard over 40 hours of testimony thus far and welcomed hundreds of written comments as to whether the state should end the separate wage policy for workers and others who rely heavily on tips. The proposed law has many supporters, but staunch opposition as well. Our NYC unpaid contract dispute attorneys explore the potential new law and what it could mean for traditionally tipped employees in the state below.

Current Wage Minimums in New York

At present, the state of New York has two separate wage minimums for tipped and non-tipped employees. This is typical of most states across the U.S. The current tipped wage is $7.50 an hour outside of New York City and $8.65 within the city for businesses with more than 11 employees. For non-tipped employees, the minimum wage ranges by region, with a low of $10.40 per hour upstate and a high of $13 an hour in New York City.

Arguments on Both Sides

The proposal to eliminate the tipped wage grew out of concerns that workers in certain industries were being underpaid. Of particular concern were employees holding jobs at nail salons, car washes, and like locales, where they were paid the tipped wage, but often did not make enough in tips to meet minimum wage standards. A group called One Fair Wage, which is comprised of several unions and workers, supports the end of tipped wages. Already, seven other states have adopted like measures.

Those in opposition include many business owners and tipped workers in some fields. The restaurant industry is largely concerned with the measure. Some restaurant employees fear they will end up with less take home pay if the tipped wage ends. Restaurant owners similarly fear having to pay employees more with already thin profit margins. Detractors from the measure point out that Maine eliminated tipped wages in 2016, only for the state to reinstate the tipped wage a year later. Employers and employees alike should closely monitor the news for more information on the potential law change and consult an employment law attorney for any concerns with their pay.


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