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Take Action: Tip Credit Alert for NYC Council

By NYC Hospitality Alliance

Last week, NYC Council Member Francisco Moya sent a letter to his fellow Council Members asking them to sign his resolution calling on the NYS Department of Labor to eliminate the tip credit in the restaurant, nail salon and car wash industries.

In response, the NYC Hospitality Alliance sent a letter a letter to all other 50 Council Members URGING them not to sign on to the resolution if it includes a request to eliminate the restaurant tip credit.  A copy of that letter can be read below.

YOU NEED TO TAKE ACTION:

Contact the Council Member in each district you own, operate or work at a restaurant or bar where saving the tip credit is important.

Click here to locate your Council Member and get their contact information.

Send them each a personal message about why the tip credit is so important to your business(es) and jobs. Urge them NOT to sign Council Member Moya’s resolution calling on the Department of Labor to eliminate the restaurant tip credit. Please CC: info@theNYCalliance.org on your email so we can track the outreach. If you have questions or needs assistance you may also email info@thenycalliance.org

NYC Hospitality Alliance Letter to Council Members:

Reject Council Member Moya’s Resolution to Eliminate Restaurant Tip Credit

Last week, Council Member Francisco Moya asked you to sign his resolution calling on the NYS Department of Labor to eliminate the tip credit in the restaurant, nail salon and car wash industries. Before you act, we URGE you to speak with full-service restaurant owners in your district about how the financial impact of losing the restaurant tip credit will devastate their small businesses and hurt workers. The following information and facts are essential in your consideration of this matter.  PLEASE READ and take a moment to listen to these voices before deciding:

·        20 female restaurant owners from Harlem (including the iconic Sylvia’s Restaurant) publish Op-ed: Wage hike is tipping point for restaurants | Crain's New York ...

·        Select Support Letters and OP-EDs in favor of the restaurant tip credit from: Senator Brian Benjamin, Assemblywoman Inez E. Dickens, Assemblyman Joseph R. Lentol, Senator Kevin S. Parker and Assemblywoman Stacey Pheffer Amato. (letters attached)

·        Tezra Bryant is a restaurant server at Charlies Bar & Kitchen published this op-ed: Tipping - Op Ed - The Bronx Chronicle

·        Directors of the Justice Will Be Served Campaign, Flushing Workers’ Center & NYC Hospitality Alliance op-ed: Keep the tip credit, Mr. Governor - NY Daily News

We respectfully request you further consider the NYC Hospitality Alliance’s comments to the Department of Labor in which we correct some of the misleading and incorrect arguments that have been made for eliminating the restaurant tip credit.

1.  Fair and equitable regulation is fine. Excessive and unrelenting regulation is not. We supported the $15 minimum wage, anti-harassment training and strong worker protections.  But between market pressures and the most competitive restaurant scene in the world, our industry needs to breath. We need relief, not more regulations.  By the end of 2018, recent labor mandates for restaurants in NYC include doubling the tip wage in a mere three years.  Eliminating the tip credit would triple it.  Six consecutive, annual minimum wage increases.  A $300 increase to the minimum weekly rate for salaried employees, paid sick leave and healthcare costs.  Plus, the upward pressure these increases placed on wages as a whole.  Eliminating the tip credit would cost an additional $14,000 per full time, tipped employee, per year. Please have empathy and imagine if your personnel expenses increased 200% within a few years.

2.  Raising the tip wage will not reduce wage theft. We stand in solidarity with all workers who testify about horrible work conditions they’ve endured.  We do not believe, however, that an employer who breaks the law now, will magically comply with the law if you make them pay more. If you eliminate the tip credit the damages will be bigger and honest employers and workers will be hurt.

3.  If sexual harassment is tied to tipping, this proposal does nothing to change that: If advocates believe there is a correlation between tipping and sexual harassment then why do they say they want to preserve the tipping system, rather than abolish it?  Even if New York eliminated the tip credit, by their own admission, employees would still rely on tips for income, therefore, according to their logic, workers will still be trapped in an economic system that perpetuates harassment.  Sexual harassment and exploitation is unconscionable and illegal and that’s why our state and city passed mandated anti-sexual harassment training we support.

4.  Comparing NYC to California is purposefully misleading: West Coast restaurants are not all thriving, and many are furious by the fake news campaign suggesting they are. In fact, there is a campaign to get a tip credit. Earlier this week, The New York Times ran a story about San Francisco  showing that service staff there is being eliminated due to high labor costs, which includes no tip credit. Even considering this, in California, commercial rents are much cheaper than NYC. Food costs are much less.  Comparing NYC to California is comparing apples and oranges.

5.  The data already shows that the industry is hurting here in NYC: Since the tipped wage increased in 2015 the full-service restaurant industry in NYC is changing and hurting. Annual employment growth averaged almost 7%. It then dropped to less than two percent. During a similar period, there was 23% growth in full liquor and beer & wine licenses.  After the 50% increase in the tip wage, it plummeted to less than two percent.

6.  Tipped employees here in NYC are doing well, thank you.  Our survey covering over 14,000 tipped workers, found their median wage to be $25 an hour. According to The Justice Will Be Served Campaign who represents low-wage workers, most of whom make less, still do not want the tip credit eliminated either.

You’ve heard the challenging stories from restaurant owners. You’ve heard from workers who have had their hours and overtime cut back or lost their jobs. New Yorker’s are saying, “You’ve got to be rich to eat at a normal restaurant in NYC these days.” We are confident that a commitment to worker rights, economic opportunity and supporting local businesses are not at odds. We can increase enforcement of wage theft and harassment laws, while keeping the current tip credit intact.

We urge you not to sign Council Member Moya’s resolution, if the final version includes a request that the NYS Department of Labor eliminate the restaurant industry tip credit.

Thank you for your consideration. If you have any questions/comments please contact arigie@thenycalliance.org or 212-582-2506.

 


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