Tipped Minimum Wage Bill Debate Fires Up

The battle over tipped minimum wage in restaurants is ramping up: On Tuesday, more than 20 restaurateurs called for the elimination of a tipped minimum wage in New York, while another set of restaurateurs are hosting a press conference this week arguing against the change.

Currently, the tipped minimum in NYC is $8.70, and that is set to rise to $10 by the end of the year, which is still less than the $15 full minimum wage for non-tipped workers. Governor Andrew Cuomo and the Department of Labor will have its final day of hearings on Wednesday, deciding whether or not to eliminate the tipped minimum in favor of paying all staff the same minimum wage.

On one side, restaurant owners part of the Restaurants Advancing Industry Standards in Employment (RAISE) wrote a letter to Cuomo Tuesday arguing in favor of getting rid of the tipped minimum. The group includes Dirt Candy owner Amanda Cohen, Diner NYC Restaurant Group (Marlow & Sons, Reynard) owner Andrew Tarlow, and Gjelina co-owner Shelley Armistead.

In the letter, they say that eliminating the tipped minimum is good for workers and for business. Seven other states — California, Alaska, Minnesota, Oregon, Washington, Wisconsin, and Nevada — have gotten rid of it, and the letter argues that those states “have 13 percent higher restaurant sales by population” compared to New York and also outpace New York in restaurant employment and establishment growth rates.

Though some of restaurants have no-tipping policies, the letter does not call for the elimination of tipping altogether: “Tips can act as an incentive or bonus for exceptional service but should not be a substitute for the living base wage that all workers need,” the letter, in full below, reads.

But not all NYC restaurateurs agree: Another group of restaurateurs, service workers, and labor and business groups is set to hold a press conference on Wednesday, June 27 arguing to maintain the current tipped minimum. The chef/owner of Melba’s in Harlem Melba Wilson is among those arguing in favor of the current tipped minimum, along with the president of the Manhattan Chamber of Commerce. Tipped restaurant workers are also scheduled to speak out against eliminating the tipped minimum at the press conference.

In an op-ed, NYC Hospitality Alliance, which represents restaurant and bar owners, and Flushing Workers Center and Justice Will Be Served, which both represent service workers, say that the lower base minimum wage keeps labor costs down for restaurants and that it could hurt workers by increasing the chances of wage theft. “If an employer does not pay the minimum wage now, they won’t magically comply with the law if you make them pay more,” the op-ed reads.

The minimum wage issue in restaurants has been controversial, with some restaurants across the country dramatically changing their service models as a reaction to higher labor costs associated with minimum wage increases. Many closing restaurants have cited increasing labor costs as part of the reason, but one study, by the University of California Berkeley found that the last minimum wage hike in Seattle achieved its goal of improving pay for restaurant workers without impacting jobs.

Update: Though Danny Meyer has said he supports eliminating tipped minimum in the past, ROC president Saru Jayamaran now says that the group mistakenly put Union Square Hospitality Group and Danny Meyer on the letter. Meyer’s group declined to comment on their removal from the letter signers.

• Danny Meyer and other restaurant owners pen letter urging Cuomo to abolish tipped wage [Crain’s]
• Keep the tip credit, Mr. Governor [NY Daily]