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Top NYC Restaurateurs Back Reopening Plan With Focus on Eliminating the Tipped Minimum Wage

USHG’s Danny Meyer, Momofuku’s David Chang, and more have signed on in support of the proposed industry plan

Two people sit in a temporary outdoor dining area as New York City moves into Phase 3 of re-opening following restrictions imposed to curb the coronavirus pandemic on July 13, 2020.
Outdoor dining in NYC
Photo by Cindy Ord/Getty Images
Erika Adams is the editor of Eater Boston.

As NYC restaurants navigate a labyrinth of reopening guidelines while eyeing dwindling federal aid and the end of the state’s emergency eviction moratorium, some in the industry are taking action by proposing their own long-term restaurant reopening plan — one that puts the industry’s ongoing issues with wage inequality at the forefront.

Nearly 50 NYC restaurant owners, including well-known restaurateurs Danny Meyer of Union Square Hospitality Group, David Chang of Momofuku, and Tom Colicchio of Crafted Hospitality, are pledging their support of a new “Safe and Just Reopening” plan for restaurants, developed in partnership with One Fair Wage, a non-profit organization that has long advocated for the elimination of the tipped minimum wage in the industry. Over 200 restaurant workers in the state have also signed on in support of the plan, according to a One Fair Wage spokesperson.

The four-part plan calls for the elimination of the tip credit for restaurants in the state, a labor law that allows owners to pay tipped workers a base minimum wage of $10 per hour plus tips while NYC’s regular minimum wage is $15 an hour. Simultaneously, the plan calls for state legislators to allow tips to be shared equally across a restaurant’s entire staff, another measure that is not allowed under current labor laws for tipped workers.

The plan also demands for payroll tax relief and the ability for restaurant owners who agree to phase out the tipped minimum wage to add a 5 percent “safe reopening” surcharge to customers’ checks.

Under the proposed plan, owners would have five years to phase out the tipped minimum wage at their restaurants if they are currently using it, says One Fair Wage president Saru Jayaraman.

Restaurant owners and staffers gathered at Harlem fine dining restaurant Reverence, owned by Black chef Russell Jackson, today to unveil the plan and drum up customer support for Jackson’s restaurant. Jackson, who has pledged support of the reopening plan, is selling a special three-course takeout meal priced on a sliding scale until 4 p.m. today.

Establishments in support of the plan are displaying signs at their restaurants that read, “Service Industry Workers & Employers United for a Safe & Just Reopening.”

Restaurant owners have said that making a move toward eliminating the tipped minimum wage would require more legislative support, which is why the plan also advocates for tip sharing and surcharges, Jayaraman says.

Many of the restaurants that have signed on in support of the reopening plan are currently involved in the city’s Restaurant Revitalization Program, a restaurant support fund that the mayor’s office launched in June with support from One Fair Wage. In that program, restaurants receive up to $30,000 apiece from the city, plus additional financial support from One Fair Wage, in order to help with reopening and rehiring costs for the businesses. In turn, owners commit to paying every employee at least $15 an hour within the next five years.

“The backing of the Restaurant Revitalization Program is the major driving force in our ability to commit to this change and actually have the ability to roll out a trial effort,” says Melissa Morales, the co-owner of Mediterranean restaurant Pomp and Circumstance in Williamsburg.

Michael Fuquay, owner of neighborhood spot the Queensboro in Jackson Heights and another participant in the Restaurant Revitalization Program, says that he would be able to eliminate the tipped minimum wage “tomorrow” if there was more government support involved. “We’re agreeing that over time we’re going to eliminate the tipped minimum wage in our restaurant,” Fuquay says. “Our hope is that the state will come along beside us.”

USHG’s Danny Meyer, who also pledged support for the plan, recently announced a return to accepting tips after years of running gratuity-free restaurants under the company’s “Hospitality Included” program, saying that the business model was not feasible without legislative changes. Now, he’s advocating alongside Jayaraman for the ability to share tips in New York equally among all staff members while eliminating the tipped minimum wage at restaurants.

The elimination of the tipped minimum wage was a hot-button issue in the state last year, leading to Gov. Andrew Cuomo abolishing the law for everyone except restaurant workers in January 2020. NYC restaurants have also long been fighting for the option to add surcharges to customers’ bills, which is currently illegal under state law.

Pushing for these legislative changes hasn’t been successful yet, but the pandemic could be the catalyst to finally prompt lawmakers to make meaningful headway on these issues, Jayaraman says.

“For the first time we have a large group of employers ranging from Tom Colicchio to small Harlem and Brooklyn restaurant owners who are agreeing with us on a comprehensive plan for restaurant relief that includes One Fair Wage,” she says.

The non-profit has seen many employers already move to paying at least $15 an hour as they try to convince staffers to come back to work during the pandemic, and staffers are more vocally advocating for higher wages in order to return to work. In this climate, Jayaraman says, “we’re frankly more confident than ever that [the elimination of the tipped minimum wage] can happen now.”

Disclosure: David Chang is producing shows for Hulu in partnership with Vox Media Studios, part of Eater’s parent company, Vox Media. No Eater staff member is involved in the production of those shows, and this does not impact coverage on Eater.