Having dedicated my career to enforcing wage and labor laws, I know firsthand how difficult it can be to ensure that tipped workers are paid fairly. Our needlessly complex wage system — which allows employers to pay a lower “subminimum” wage to tipped workers, who then must rely on tips to make up the difference — prevents many tipped workers from taking home the full minimum wage as required by law.
Wage violations are rampant in tipped industries such as hospitality and food service. According to the National Economic Council and the U.S. Department of Labor, the two most common wage violations are in these industries. They are the failure to properly track employees’ tips, and failure to make up the difference when earnings, including tips, fall below the minimum wage.
When surveyed, 10% of tipped workers nationally reported earnings that fell below the federal minimum wage. By contrast, only 4% of all workers reported earning less than the federal minimum wage.
In some cases, this is because employers and employees alike are unaware of the employer’s obligation to make up the difference when employees earn less than the minimum wage. Our convoluted system puts even well-intentioned business owners at risk of unknowingly violating the law.
In other cases, workers know their rights but fear retaliation for attempting to enforce them. And in too many cases, employers know the law but choose to operate in bad faith. Given limited resources for enforcement, the risk of being caught is low — and the risk of facing serious consequences even lower.
Whatever its causes, shortchanging workers is unacceptable. Fortunately, there is a simple solution: Gov. Cuomo’s Department of Labor can implement One Fair Wage in New York State to require that tipped workers be paid the same hourly minimum wage as non-tipped workers.
The government does not have all the resources it needs to enforce our current laws. However, One Fair Wage sets a standard that is clear, unambiguous and therefore far easier to enforce.
Even if wage theft weren’t as common as it is, eliminating the tipped wage would improve workers’ lives in other ways. Tipped workers do not take home the same amount of money for every hour worked. Especially in the restaurant industry, their pay varies wildly by day, time and season.
Some servers can earn far above minimum wage on a Friday or Saturday night but earn far below it other nights. Most have little to no control over which shifts they are assigned, and if they are stuck with a Monday lunch shift, they could bring home next to nothing. A rainy day, a stingy customer, a slow winter: factors as arbitrary as these can massively decrease a server’s earnings, no matter how hard she works.
Being at the mercy of customers in an industry where “the customer is always right” also leaves servers, particularly women, deeply vulnerable to sexual harassment.
In the seven states that already have One Fair Wage, tipped workers experience lower rates of poverty, wage theft and sexual harassment than tipped workers in the rest of the nation. These states and cities have also seen some of the strongest job growth in the restaurant industry.
Implementing One Fair Wage will benefit all New Yorkers, especially tipped workers, who are disproportionately female, immigrant and people of color, and who often struggle to make ends meet. Cuomo and the New York State Department of Labor can lead the way to phase out the subminimum wage. They should do so without delay.