For Immediate Release: January 30, 2015
Contact: Maria Myotte, maria@rocunited.org, 720-352-6153

WAGE BOARD RECOMMENDATION REPRESENTS SIGNIFICANT PROGRESS TOWARD ACHIEVING FAIR PAY FOR ALL NEW YORKERS

Friday’s Announcement Makes Significant Progress towards Creating One Fair Wage, Though a Troubling Provision May Hinder Progress for Employees and Employers across the State

New York, NY – In an important step forward for working New Yorkers, the Wage Board voted Friday to increase the tipped minimum wage- frozen since 2011- to $7.50 an hour, a raise of  $2.50 an hour for the vast majority of New York’s 400,000 tipped employees.  Significantly, the Board also called for a review of the continued use of the two-tiered wage system, which permits employers to pay tipped workers a subminimum wage. Taken together, these proposals represent marked progress towards the goal of achieving one fair wage for all New Yorkers. However, a controversial fifth proposal threatens to undermine these advances.

Comprised of a public, labor, and business representative, the Wage Board was convened last fall by Governor Cuomo’s Labor Commissioner to review and recommend changes to the regulations that govern wages for tipped workers in New York State.

As the wage board deliberated its recommendations over a nearly six month period, tipped workers, high road employers, faith leader and advocates called for One Fair Wage for all workers, tipped and non-tipped, describing the destructive impact of the lower tipped minimum wage on New York’s majority female tipped workforce. A poll released in early January showed overwhelming, bipartisan support for increasing the tipped minimum wage till it reached that of the general minimum wage- with 75% of likely voters saying they supported the increase. This public momentum was clearly felt by the wage board on Friday.

Under the proposals, all tipped workers would to be raised to a minimum of $7.50 an hour by the end of the year and an additional $1 an hour in New York City (if the state legislature votes for a higher minimum wage for the City). The proposal also calls for a review of whether the current system of cash wages and tip credits should be eliminated altogether. Seven states – including the entire west coast and Nevada – require employers to pay the same minimum wage to both tipped and non-tipped employees.

However, in two-to-one vote, the Board endorsed an alarming and unprecedented provision that would effectively undermine these advances. It calls for an additional $1.00 per hour “tip credit” if employers can prove that tipped workers earn 120% of the full minimum wage (or 150% in New York City).  The proposal would roll back wage gains for workers made by the rest of the recommendation. Equally bad for businesses, it would create an uneven playing field by allowing some employers to pay their workers less than the competition and open owners up to additional liability by adding complexities to an already cumbersome system.

We are confident Governor Cuomo and Commissioner Musolino will build off of the initial recommendations of the Wage Board to ultimately protect all working New Yorkers. We hope they will also reject their potentially disastrous recommendation to further complicate an already burdensome system. It’s what our economy needs and our workers deserve.  

Friday’s Wage Board recommendation includes:

  1. Consolidating various restaurant and hospitality tipped worker categories into one category;
  2. Raising the state tipped minimum wage for restaurant and hospitality tipped workers to $7.50 per hour;
  3. Raising New York City’s tipped minimum wage to $8.50 per hour should the legislature raise the City’s minimum wage;
  4. Conducting a review of whether or not to eliminate the subminimum wage for tipped workers entirely and guarantee these workers the full minimum wage, as 7 other states have done;
  5. Allowing employers that can demonstrate that their employees make more than 120% of the full minimum wage (or 150% of the full minimum wage in New York City) to take an additional tip credit of $1.00.

ADDITIONAL RESOURCES
NEW YORK STATE POLL: 75% of New York state voters support eliminating, lower tipped minimum wage
NATIONAL POLL: 71% of Americans support eliminating, lower tipped minimum wage

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Co-founded by leading workers’ rights advocate Saru Jayaraman (“One of the top 50 most influential people in the restaurant industry” – Nation’s Restaurant News) ROC United has grown to over 13,000 worker-members across 26 cities in the US, winning 15 worker-led campaigns, totaling $8 million in stolen tips and wages.