Government Affairs

Tipped Wages and the Tip Credit

On June 27th, 2018, we were proud to stand alongside a diverse coalition of 250 restaurateurs, tipped workers and advocates at our rally calling on Gov. Cuomo and the Department of Labor to save the tip credit!

When called upon to have your voices heard, NYC Hospitality Alliance members came out en masse and sent a clear, strong and respectful message that eliminating the tip credit will be disastrous for our city's restaurants and bars. We could not have been prouder of this grassroots effort and seeing you all engaged in the political process. Tipped restaurant and bar workers from all walks of life also made powerful arguments about why New York State must keep tip credit intact, in its current form. In addition to everyone who testified we submitted nearly 1000 "Save the Tip Credit" cards signed by operators and workers from all over the five boroughs.



During the hearing, The Alliance and our members made it clear that:

  1. Fair and equitable regulation is fine. Excessive and unrelenting regulation is not.

  2. Raising the tip wage will not reduce wage theft.

  3. If indeed sexual harassment is tied to tipping, this proposal does nothing to change that.

  4. Comparing NYC to California is purposefully misleading.

  5. The data already shows that the industry is hurting here in NYC

  6. Tipped employees here in NYC are doing quite well, thank you.

The Alliance will continue to keep its members updated on this matter. You can also visit the Save NY Tips website and sign up for the newsletter to learn more about the issue.


Update as of January 2020

The NYS Department of Labor released its Report and Recommendations to Governor Cuomo that resulted from the "Tip Credit" hearings held around the state, which the NYC Hospitality Alliance, our members, and many others participated in. The Report and Recommendations leaves the "Tip Credit" in effect for businesses covered by the Hospitality Wage Order, which covers restaurant and nightlife workers.


In response to the report, Governor Cuomo announced he will follow its recommendations and eliminate the Tip Credit for businesses covered by the Wage Order for Miscellaneous Industries and Occupations, which covers nail salon workers, car wash workers, and other occupations where tipping is not always expected, but leave the Tip Credit for restaurant and nightlife workers unchanged.


The NYC Hospitality Alliance was grateful for the opportunity to make our case during the public hearing process and we are very pleased that this recommendation reinforces the fact that the hospitality industry, which provides positive economic opportunities and advancement for hundreds of thousands of New Yorkers is fundamentally different than these other industries. We will, of course, stay engaged in this critical issue and we thank all our members and tipped workers who participated and had their voices heard during the public hearing process.

Read Transcription of PDF MEMORANDUM OF OPPOSition - s4405 - a6203

NYC!HOSPITALITY ALL I ANCE MEMORANDUM OF OPPOSITION S4405 (Stewart-Cousins) / A6203 (Jaffee) Eliminates the tip wage for food service workers The New York City Hospitality Alliance — representing restaurants, bars, destination hotels and industry suppliers across the five boroughs — strongly opposes S4405/A6203, which would eliminate the tip wage for restaurant servers and other food service employees. • First and foremost, this bill is predicated on a rhetorical fallacy, that tipped workers earn a "sub-minimum wage." This is absolutely untrue, as every employee — tipped or non-tipped — is required by law to receive the legal minimum wage in New York State. If an employee's base wage plus tips do not equal or exceed the state minimum wage, the employer is legally mandated to "make up the difference" to ensure the employee receives the full legal wage. If an employee does not receive this legal minimum the employer is breaking the law and the issue is one of enforcement by the NYS Department of Labor, not the law itself. There simply is no such thing as a "sub-minimum wage" in New York and it is rhetorically unfair to describe this legal payment structure — which was approved by a NYS Wage Board — in such a manner to try and achieve a political or policy change. • Furthermore, the longtime financial structure of the New York restaurant industry — which was obviously built with the tip credit as a key part of a restaurateur's financial projections — would be dramatically impacted by such a drastic change. Restaurants in NYC currently operate on exceedingly thin margins (often in the low single digits) and are faced with major financial challenges, including commercial rents that have doubled, tripled or quadrupled; new mandates on paid sick leave and other benefits; and an increased minimum wage, tip wage and overtime exempt salary already. The complete elimination of the tip wage would result in significant job loss, both from restaurant closures as well as the obvious need to reduce service staff. • Contrary to the claim, eliminating the tip credit does not eliminate the onus on employers to keep accurate records and follow the law because they still need to keep detailed records about their employees to ensure that tip pools are properly organized and maintained. • Numerous restaurants would likely eliminate tipping altogether, which will result in the dramatic reduction in earnings by thousands of currently tipped workers in New York (in fact, a 2014 survey of hundreds of restaurants by the NYC Hospitality Alliance found that the average restaurant server makes in excess of $25 per hour — a number that obviously would be completely unsustainable under this legislation). Wage and hour issues are taken seriously by the NYC Hospitality Alliance and our members and we will continue to work collaboratively with the NYS Department of Labor to ensure that existing laws and regulations protect employees and employers and are effectively enforced. Again, the issues that 54405/A6203 seems to seek to address are issues of enforcement and not policy, and so for all of the above reasons the NYC Hospitality Alliance strongly opposes this legislation. ABOUT THE NYC HOSPITALITY ALLIANCE The New York City Hospitality Alliance is a broad-based membership association founded in 2012 to foster the growth and vitality of the industry that has made New York City the Hospitality Capital of the World. It is the first association ever formed in New York City representing all facets of this diverse industry: restaurants, bars, lounges, destination hotels and major industry suppliers. Advocating on behalf of our members at all levels of government, The Alliance supports pro-growth public policy, encourages investment in and promotion of NYC's hospitality industry, and evaluates the development, implementation and fairness of relevant government regulations. Should you have any questions about the NYC Hospitality Alliance's position, please call Executive Director Andrew Rigie at 646-532-2756 or our lobbyists, Yoswein New York, Inc., at 212-233-5700.

#SaveNYTips Why NYC Restaurants Need the Tip Credit
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