Survey finds most NYC restaurant owners want to keep tip credit system, despite push for new bill

ByEyewitness News WABC logo
Monday, January 29, 2024
Most NYC restaurant owners want to keep tip credit system: survey
Raegan Medgie has the latest.

NEW YORK CITY (WABC) -- A proposed bill in New York would raise the minimum wage for service workers as officials are also considering making changes to the rules governing tips in restaurants.

Many New York restaurant owners say messing with tips will end up causing them to lay people off and pass higher costs onto the customer.

Under current law, restaurant employers in New York City can pay workers who customarily receive tips a base wage of $10.65 per hour if that wage combined with their tips equals or exceeds $16, which is the current minimum wage, otherwise, they are required by law to pay the employee the difference.

However, some restaurant servers often make far more, upwards of $20 to $40 an hour with tips.

Assembly member Jessica Gonzalez-Rojas said Monday she wants better for those who work in the service industry and is co-sponsoring a bill to do just that.

"We'll raise the minimum wage over the course of five years, while at every stage of that, will continue to make tips on top," Gonzalez-Rojas said.

That means service workers would catch up earning $16 per hour -- the state's minimum wage. But Gonzalez-Rojas said it would not eliminate tipping altogether.

"I think it's an excellent idea, because a lot of the time we get short-tipped, so with this, plus the tips, I think it will work out better for people," Mary Ann Spitz, who works at Jackson House Restaurant, said. "Do I see it happening? Not really."

The NYC Hospitality Alliance feels the same.

"One of the concerns is that the amount that restaurants would have to raise menu prices to cover these new costs would be a shock to system," said Andrew Rigie.

A new survey by the NYC Hospitality Alliance revealed that 95% of New York restaurant owners oppose the legislative campaign to eliminate the tip credit system.

Restaurant owners surveyed say abolishing the tip credit would cost about $12,000 more to employ a full-time tipped employee.

"It's clear New York's restaurants and bars rely upon the tip credit," Rigie said. "There's no reason for the state's elected officials to upend the working model of New York's restaurant industry and put small businesses and jobs on the chopping block, while making it much more expensive for New Yorkers and visitors to dine out in the Empire State."

Proponents of the bill like the Fair Wage Coalition say the current system creates inequities among workers and are asking for wait staff to be paid minimum wage if they're employed in New York City, Long Island, and Westchester County.

The proposed bill to increase minimum wage for service workers is in Committee right now, so it will be months before a decision is made.

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Raegan Medgie has the story.


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