Department of Labor Begins Public Tip Credit Hearings

May 9th, 2018

Last week, the New York State Department of Labor held the first of seven public hearings to “examine the state’s tip credit,” which allows restaurants and other tipped businesses to make up minimum wages with tips. If the tip credit is eliminated, employers would have to pay tipped workers an additional $2.90 per hour throughout Upstate (and more in and around New York City).

With a number of advocacy groups pushing for the end of the tip credit, it shouldn’t come as a surprise that the Governor has already reached the conclusion that the minimum wage tip credit should be eliminated.

The public hearings began on Friday on Long Island.   Additional hearings will be held in Watertown on April 25; in Syracuse on April 30; in buffalo on May 8, and in Albany on May 18. (Written testimony can be sent until July 1.)

We think this would be a mistake. End the tipping model in favor of a paying servers a flat rate may sound like a good idea, but restaurants operate on extremely thin profit margins and eliminating the tipped minimum wage would likely eliminate these margins altogether. The vast majority of servers make far more with tips than they would at the higher base wage.

In short: the state shouldn’t fix what isn’t broken.