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Daniel Krieger

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New York Was Wrong to Exclude Tipped Workers From Full $15 Minimum

City waiters, by the end of 2018, will earn an hourly rate of $10 before gratuities

These are unquestionably historic times for the U.S. labor movement: As workers face stagnant wages – despite a growing economy – New York and California last week became the first two states to increase the minimum hourly wage to $15 – roughly $31,000 a year. But when New York governor Andrew Cuomo publicly laid out the details of his plan on Thursday, which includes a whopping 70 percent raise for the state's lowest paid workers, he overlooked a crucial question: What the state's 300,000 waiters, bussers, bartenders and other tipped workers would earn. And the answer is: Not as much as their counterparts in California, and not a full $15 cash wage. In fact waiters in some parts of the state could have their pay frozen for three years or more.


Allow me to explain. Cuomo, upon debuting his campaign for a $15 minimum last September, said he was seeking an "all industry" wage for "all workers." Many interpreted that to mean the governor would follow the path of California and six other states in requiring waiters to be paid the full minimum, rather a separate, lower minimum, with gratuities making up the difference.

A single wage would've been a logical policy evolution. Albany gave a 50 percent raise to waiters in January, boosting their pay to $7.50/hour, and ranking New York just behind Hawaii as the state with the smallest gap between the full minimum and the tipped minimum. Democratic presidential candidate Hillary Clinton, during a speech in March at New York's Jacob Javits Center, with Cuomo himself in the audience, called for an end to the tipped minimum. And Danny Meyer and other restaurateurs around the city have been eliminating gratuities at their establishments in favor of more reliable hourly pay and stable schedules. The momentum for a single wage was there. The momentum, alas, was not sufficient.

New York City cooks and dishwashers see their minimum hourly pay jump up by $2 to $11 at the year's end, and then gradually rise to $15 by the end of 2018. But waiters will see their pre-tip wages frozen for a year, before rising to just $10 in 2018.

Minimum Wage for New York City (Tipped Wage in Parentheses)

Eleven or More Employees

  • Dec. 2016: $11 ($7.50)
  • Dec. 2017: $13 ($8.70)
  • Dec. 2018: $15 ($10)
Ten or Fewer Employees
  • Dec. 2016: $10.50 ($7.50)
  • Dec. 2017: $12 ($8)
  • Dec. 2018: $13.50 ($9)
  • Dec. 2019: $15 ($10)

Wages will increase even more slowly in Long Island and Westchester, where the tipped minimum will be frozen at $7.50 for two years before gradually rising to $10 in 2021. And upstate, the tipped minimum will be frozen for three years – or really four because the rate only goes up by thirty cents on December 31st, 2019.

So instead of narrowing the difference between the tipped minimum and the full minimum, New York is reversing course and widening it to a full $5. That's nowhere near the country's largest pay gap, a dubious honor that will go to the nation's capital this summer when the full minimum rises to $11.50, shooting even further ahead of the $2.77 tipped minimum.

But what this means for the Empire State is indisputable: New York is going back to placing a larger burden on the consumer, rather than on restaurant owners, of paying waiters, which is a helluva of a thing when you think about how Washington and Oregon have long existed without this two-tiered pay system – and you don't see those states falling off into the Pacific Ocean.

Minimum Wage for Long Island and Westchester (Tipped Wage in Parentheses)

  • Dec. 2016: $10 ($7.50)
  • Dec. 2017: $11 ($7.50)
  • Dec. 2018: $12 ($8)
  • Dec. 2019: $13 ($8.70)
  • Dec. 2020: $14 ($9.35)
  • Dec. 2021: $15 ($10)

If any of these tipped minimum numbers come as a surprise, there's a good reason for that. While the state budget specifically bullets out the wage schedules and pay rates for the full minimum, the law buries the tipped minimum language in a twelve line section that reads like a messy, marked up resolution from a high school Model UN conference.

And here's the best part: The tipped rates are not expressed as actual dollar-based wages in the budget, but rather as fractions of the regular wage. Why bother telling low-paid workers what they're actually going to make when you can give them a math problem instead?

[The pass at P.J. Clarke's by Krieger]

The tipped minimum is set at "two thirds of the minimum wage rate," and that number is then "rounded to the nearest five cents or seven dollars and fifty cents, whichever is higher." So in Westchester, where the product of the two-thirds equation is $6.33 for 2016, the result is a frozen wage at $7.50.

New York's Department of Labor will eventually issue wage ordinances with clear language on the specific minimums, but there's something cynically appropriate about the way it's all phrased now; the state's tipped minimum math isn't too different from the gratuity-not-included calculations that lets restaurants keep their prices artificially low to the tune of 20 percent.

One can imagine the conversation a manager has with a food runner. Instead of getting 83 percent of the full minimum before tips, which is what you're entitled too now, you'll get 66.66 percent from now on. You earned it, buddy.

Minimum Wage Schedule for Upstate (Tipped Wage in Parentheses)

  • Dec. 2016: $9.70 ($7.50)
  • Dec. 2017: $10.40 ($7.50)
  • Dec. 2018: $11.10 ($7.50)
  • Dec. 2019: $11.80 ($7.80)
  • Dec. 2020: $12.50 ($8.35)

Politics, of course, is all about the art of compromise, and Cuomo deserves credit for raising the tipped minimum to $10 an hour, the highest in the country. That rate, incidentally, is $2.75 higher than the full federal minimum of $7.25, which more than half of the U.S. states adhere to, and it's a heck of a lot higher than the national tipped minimum, which has remained at a paltry $2.13 for 25 years.

Andrew Rigie, executive director of the New York Hospitality Alliance, a group that represents restaurants, penned a Daily News editorial in December calling for a compromise of sorts: freezing the tipped minimum at $7.50 even if the full minimum rose. Labor leaders like ROC-United's Saru Jayaraman, in turn, rallied for a single wage. Cuomo didn't relent on the full minimum, save for the delay in the upstate regions, but he ended up deferring a bit to restaurant groups on the tipped minimum. So be it.

But still. Regardless of what one thinks of these policy decisions, it's a shame that Cuomo didn't use his bully pulpit to follow the lead of Hillary Clinton and Meyer and engage the public in a livelier debate over the tipped-minimum, a wage whose mere existence many Americans aren't even aware of. When I was a waiter in Washington DC in the early-aughts, I knew I was being paid less than my friends with salaried jobs, but I had absolutely no idea what my cash wage was, nor did I know that my employer was supposed to give me a pay bump when my tips fell short of the full minimum.

The greater the difference between the tipped minimum and the full minimum, the greater the risk that an employee will not make what she is legally owed.

According to a 2014 White House report, 10 percent of tipped workers reported earning less than the full minimum (versus four percent of all workers). That should serve as a strong reminder: The greater the difference between the tipped minimum and the full minimum, the greater the risk that an employee will not make what she is legally owed.

Even more specific to New York: Hospitality industry jobs rank among the lowest paying jobs in the state, with most hourly professions earning well under $30,000 a year. This is even more the case in my native Long Island, which boasts some of the most expensive homes in the country (ever hear of The Hamptons or The Great Gatsby?), and yet it's where waiters only make around $23,980 – roughly $11.52 an hour, well below the local living wage of $13.43 in Nassau County. Bussers and backwaiters make even less, at about $9.65 an hour.

And that's why part of the new law stings: It delays the tipped minimum increases in Long Island for two years. As New York City waiters, who already earn about 15 cents more than the $14.30 living wage in the five boroughs, get a 33 percent pre-tip raise to $10 over the next two years, servers in Manhasset, where homes rarely dip under $950,000, will only earn a rate of $7.50 before gratuities.

Every hospitality worker deserves a single minimum wage or higher, issued by the payroll department of a restaurant, rather than by the whims of a customer. But within the confines of New York's two-tiered pay system, it's unfortunate that many of the workers most in need of a raise – tipped workers – are the ones seeing their pay hikes delayed by politics.

Here it's worth noting that the longstanding pay gap between waiters, who often earn more because they can collect tips, and kitchen staffers, who frequently earn less because they do not, doesn't always hold true outside of major cities; cooks frequently command higher average pay than waiters in Long Island, Western New York, the Finger Lakes and elsewhere, according to the state Labor Department.

All of a sudden those pay freezes for tipped employees don't make a whole lot of sense, do they? It's equally unfortunate that even though the food service industry employs the most American workers earning at or below the minimum wage, Cuomo, one of the great liberal icons of our country, largely swept the compensation debate for the state's tipped workers under the table.

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