Opponents of the tip credit are seizing on Kathy Hochul’s ascension to the governorship of New York as an opportunity to press their argument that ending the break for employers would narrow the wage gap between men and women.
They note that Hochul will be the first woman to hold the Empire State’s top government job. She is due to be sworn into the post on Aug. 24 as the successor to Andrew Cuomo, who surrendered the post after he was accused of sexual misconduct by a parade of female state employees.
One Fair Wage, a coalition of labor advocates and other groups opposed to the tip credit, said it intends to ask Hochul to end the concession to restaurants by executive order. Cuomo had declined to kill the credit after directing his administration to conduct a summerlong study of the state’s two-tiered pay system. Instead, the executive branch lowered the credit and opted for a patchwork of minimum wages.
The coalition plans to use the argument with Hochul that killing the tip credit would raise the income of fulltime female servers and bartenders in the state by an average of $10,400. The figure comes from research conducted by the Gender Equity Policy Institute (GEPI).
That report also concludes that women of color working as servers or bartenders would see an initial annual increase of $9,100.
All of that additional pay would come from the individuals’ employers.
Today, restaurants in New York City are required to pay most staff members at least $15 an hour. Servers are entitled to the same rate, but only $10 per hour need be paid by their place of employment if an individual pockets at least $5 in tips.
Restaurants in the suburbs of Westchester and Long Island are required to pay servers $9.35 directly and allowed to count $4.65 in tips toward the minimum wage of $14. Operations elsewhere are obliged to pay waiters and waitresses only $8.35 in cash if the other $4.15 constituting their $12.50 minimum wage comes from gratuities.
Under federal wage rules, employers are required to pay tipped employees $2.13 per hour in cash if guests provide the other $5.12 needed to meet the national pay floor of $7.25.
One Fair Wage, which is supported in part with union dollars, is pressing for an end to the tip credit in a number of states. It has also lobbied intensely for ending the federal tip credit, a move supported by President Biden.
Hochul, who served as lieutenant governor under Cuomo, has yet to reveal her thinking on the tip credit. But she supported Cuomo in his decision to keep the concession for restaurant employers back in 2018.
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