By the end of 2020, 70,000 of New York’s workers who rely on tips to supplement their wages will receive the full minimum wage from their employers on top of the tips they receive from customers for the first time.
Under current New York law, employers of workers who earn tips for their services pay far less than minimum wage in New York City. Employers use workers’ tips, known as a “tip credit,” to supplement the difference between this sub-minimum wage and the state or city minimum wage. On June 30, 2020, the tip credit will be cut in half, and on December 31, 2020, it will be eliminated altogether.
The Department of Labor’s Miscellaneous Industries and Occupations Wage Order, announced by Governor Cuomo on January 1, 2020, affects workers throughout the hospitality and service industries, including nail salon employees, car wash attendants, hairdressers, barbers, tour guides, dog groomers, door-persons, and others.
Food service workers are excluded from this wage increase. Some servers feared that employers would eliminate tipping altogether and replace it with wages lower than their current take-home pay.
According to the Department of Labor, the order is designed to affect workers who face the highest likelihood of wage theft in the current tip credit system. But food service and hospitality workers who rely on tips have long been subject to tip stealing. Tip pooling—an employer-monitored process by which tips are “pooled” together and distributed between service workers at varying rates—is allowed under Federal law, and is one of many opportunities for employers to control, and potentially dip into, workers’ cash and credit card tips. The wage increase in no way guarantees that employers will eliminate policies and practices that funnel tips out of workers’ pockets.
At The Harman Firm, we recognize that workers in the service and hospitality industries are subject to an array of illegal practices. We leverage new minimum wage regulations and long-standing employee protections to hold employers accountable for wage theft and other wage-and-hour violations. If or your fellow workers have been subject to minimum wage violations or tip stealing, contact The Harman Firm, LLP.