New York tipped restaurant workers can be paid as little as 2/3 of the current minimum wage by their employers as long as the tips they receive supplement their pay. The push in New York to raise tipped restaurant workers’ pay to minimum wage without the tip credit has intensified due to a drastic increase in recent wage theft settlements as well as a nationwide call to action aimed at putting a stop to workplace sexual harassment.
Tipped service workers and service employees often experience an alarming rate of sexual harassment by both customers and employers. The current wage structure for tipped service workers may not perpetuate sexual harassment. However, it may be a contributing factor. Restaurant workers who receive lower than minimum wages rely on the tips they make. Often, they’ll have to endure sexual harassment to ensure they receive those tips. Customers might make lewd and inappropriate comments of a sexual nature that make workers feel extremely uncomfortable, and workers may feel they have to literally “smile it off” just to receive a fair tip. Additionally, many restaurant employers leverage their authority to exploit their employees. Sexual harassment is rampant in the restaurant industry. The US Equal Employment Opportunity Commission (EEOC) is a federal agency that investigates workplace sexual harassment. The EEOC sees sexual harassment charges from the restaurant industry at a rate that is 5 times higher than in any other industry.
Governor Cuomo has unveiled a 2018 State of State Proposal to schedule public hearings that will examine and evaluate the benefits of eliminating the tip credit in New York.
“At the end of day, this is a question of basic fairness. In New York, we believe in a fair day’s pay for a fair day’s work and that all workers deserve to be treated with dignity and respect,” Governor Cuomo said. “There should be no exception to that fairness and decency. I have directed the Department of Labor to ensure that no workers are more susceptible to exploitation because they rely on tips to survive. I look forward to reviewing the findings of these hearings.”
There are opponents to Cuomo’s plan. Leaders in the restaurant industry assert that this change will hurt the industry and that many restaurants won’t be able to afford to do business. This assertion, however, doesn’t have much merit. Restaurants in California, for example, have been paying their employees minimum wage without the tip credit and the restaurant scene in California is thriving. Another common argument is that raising the minimum wage will negatively affect workers. The argument: if customers know that their servers are being paid minimum wage, they will no longer feel the need to tip. But, there’s no evidence from California nor the other states, where tipped service workers receive minimum wage without the tip credit – Alaska, Washington, Oregon, Nevada, Montana and Minnesota – that this is the case.
If you’ve ever been a victim of workplace sexual harassment, discrimination, tip or wage theft, contact Leeds Brown today. Our New York Employment Attorneys fight vigorously on behalf of clients to protect their employee rights. Call today for a free, confidential case evaluation at (516) 873-9550 or email us and we will respond promptly.