Minimum cash wages for tipped employees are increasing on December 31, 2017, but Gov. Cuomo wants workers who get tipped to be paid the full minimum wage. He is expected to speak more on the issue on January 3, 2018 when he gives his State of the State address.
Cuomo’s review of the current wage system will also include input from workers and business. The Department of Labor will be holding public hearings to address the wage problem. Issues likely to come up are the pay disparity and gender and race bias towards tipped female workers of color.
Understanding the wage increase
When the wage increase goes into effect, the minimum wage for tipped employees will be $8.70 with a tip credit of $4.30. Currently, minimum wage for employees receiving tips is $7.50 and the tip credit is $3.50.
What is a tip credit?
A tip credit allows employers to a subtract a tip credit from the minimum wage, reducing the minimum wage to a wage lower than the federal or state minimum wage. In theory, tipped employees will be able to earn back the reduction in tips or possibly more. When employees do not earn enough tips to reach minimum wage the employer must provide the difference.
Tipped employees are often reluctant to report violations, fearing retaliation from their employer. Employers can retaliate by scheduling employees on shifts that typically earn fewer tips, making the problem of earning a living wage even more difficult.
Tips, meant to be a reward for good service, have become essential income to a workforce already struggling to earn a living. If an employer is not paying out money to balance out a tip credit or retaliates after being confronted, an attorney can help.