New York to Raise Minimum Wage for Tipped Workers in Big Step Forward

by Mitchell Hirsch

In a huge win for tipped workers and their advocates, New York Governor Andrew Cuomo yesterday announced a wage order that will increase the minimum wage for tipped service workers to $7.50 per hour at the end of 2015 while the state studies a plan to eliminate the sub-minimum wage for tipped workers entirely.

The new statewide $7.50 minimum wage will apply to all tipped service workers, who are now paid as little as between $4.90 and $5.65 per hour, while allowing for an $8.50 minimum in New York City if the city enacts a higher overall minimum wage.  In addition, the wage order rejected a proposed new industry carve-out that would have given some businesses a larger tip allowance and effectively undermined the uniform $7.50 tipped minimum wage.

The announcement of the increase comes after a long and hard-fought campaign which was capped off withthousands of New Yorkers recently telling the labor commissioner to boost the tipped minimum wage as a step to eliminating the sub-minimum wage in the state.

“This is a major victory for workers and their advocates and marks one of the first times that the tipped minimum wage has been raised on its own. The move will boost wages for the state’s 229,000 restaurant servers, hospitality workers, and other tipped workers,” said Tsedeye Gebreselassie, senior staff attorney with the National Employment Law Project.  “And by boosting New York’s tipped wage to 83 percent of the full minimum wage, it will make New York the first state in decades to make significant progress toward eliminating the outmoded and unfair sub-minimum wage for tipped workers.”

“In eight states, employers already pay a tipped wage higher than $7.50 and are continuing to see strong restaurant job growth,” Gebreselassie added.  “While today’s announcement is a major step forward addressing the low wages, high poverty rates, and unstable paychecks that are a way of life for this predominately female workforce, we hope that it is just the first step putting New York on its way toward eliminating this archaic and unjust sub-minimum wage.”