Tipped workers are getting a pay raise

Photo courtesy of State Sen. Jessica Ramos’ office.

By Victoria Merlino

A new gubernatorial order will raise the pay minimum for certain “tipped” workers, such as nail salon workers, hairdressers, car wash workers, valet parking attendants, door-persons and dog groomers. 

Gov. Andrew Cuomo announced the order, which will impact 70,000 New Yorkers working in certain tipped fields, on Dec. 31. Restaurant servers and other hospitality workers, who are categorized differently under the state’s tipping laws, will not be affected by the order. 

Tipped fields receive a “subminimum” wage in the state, with the idea being that the employee’s tips combined with the employer’s wages will equal or exceed minimum wage, currently at $15 in New York City for organizations with 11 or more employees.

“The essence of a tip is that it is not intended to provide the base wage, but rather that tips are so common that total compensation far exceeds the minimum wage, therefore some offset of the minimum wage may be warranted in some industries,” the state’s Department of Labor wrote in a report studying the subminimum wage.

Cuomo, however, said the system fostered wage theft, especially against women, minorities and immigrants. 

“After an exhaustive investigation conducted by the Department of Labor, it's clear the tip system in many situations is needlessly complicated, allowing unscrupulous businesses to flout our nation-leading minimum wage laws and robbing workers of the paycheck they earned,” Cuomo said in a statement. “That ends now.”  

Certain tipped industries, such as nail salon workers and door-persons, suffer from nebulous tipping conventions and cultural norms that make tips unreliable, according to the study’s findings. Customers are unaware tips that are expected at a car wash for instance, compared to a restaurant, where the tipping convention is much stronger, the report found. 

Weekly fluctuations also make recordkeeping difficult, and the wage system is ripe for abuse, according to a statement from the Governor's Office. 

By Dec. 31, 2020, workers in the impacted industries will do away with the tip wage system, and have a regular minimum wage. 

Queens lawmakers, including State Senate Labor Chair Jessica Ramos, have rallied to eliminate the subminimum wage system, also describing the negative impact on low-wage immigrants and women. Ramos passed a bill in the last legislative session that would have given car wash workers full minimum wage, which Cuomo’s order now does.

On Jan. 1, Cuomo vetoed Ramos’ bill, which targeted wage theft and beefed up employees’ abilities to collect on judgements against their employers. 

“More than a billion dollars is stolen from workers’ wages in New York every year. This is money not circulating in our communities, because immigrants and low-wage workers are too often not given their tips or are even underpaid,” Ramos said in a statement to the Eagle. 

“An even broader range of industries will benefit from the Governor’s order to the Department of Labor, and we couldn’t have made it to this point without the brave workers who made their voices heard, whether in our district office, Albany or during our site visits throughout the state,” she continued.

The immigrant advocacy organization Make the Road NY also applauded Cuomo’s order. 

“It is of course incredibly dismaying that restaurant and hospitality workers are being left behind. But the Governor's order issued today is a truly meaningful advance, and we are committed to building on it until we achieve One Fair Wage for all workers,” said Make the Road NY’s Co-Executive Director Deborah Axt in a statement.