Tipping Law Will Be 'Disaster,' NYC Restaurant Owners Say

January 30, 2024 0 By JohnValbyNation

NEW YORK CITY — A push to change how tips count toward restaurant workers’ wages should be 86’d, said an overwhelming majority of New York City restaurant owners.

Eliminating the tip credit would be a “disaster” said 88 percent of eatery owners polled in a survey released Monday by the NYC Hospitality Alliance.

An even higher percentage — 95 percent — supported keeping the tip credit, which allows restaurants to pay workers a base wage lower than the minimum wage if they receive gratuities, according to the survey.

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“It’s clear New York’s restaurants and bars rely upon the tip credit,” said Andrew Rigie, executive director of the NYC Hospitality Alliance, in a statement.

“There’s no reason for the state’s elected officials to upend the working model of New York’s restaurant industry and put small businesses and jobs on the chopping block, while making it much more expensive for New Yorkers and visitors to dine out in the Empire State.”

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The survey comes as state Assembly Member Jessica Gonzalez-Rojas and state Sen. Robert Jackson pushed legislation to end the tip credit and pay restaurant workers at least the minimum wage.

Under the tip credit system, business owners can pay their workers a base wage of $10.65 so long as those employees make tips that bring their pay up to the minimum wage, currently set at $16 an hour in the city.

Supporters of eliminating the tip credit maintain that the system sets up a two-tiered wage system. A memo by Gonzalez-Rojas in support of her legislation also notes that restaurant workers make five times more sexual harassment claims.

“Reliance on tips has also created an environment where workers are victimized, and in some cases, encouraged to turn a blind eye, to rampant discrimination and sexual harassment by clientele and managers,” her memo states.

But the NYC Hospitality Alliance survey contends changes to the tip credit in other places, notably Washington, D.C., have led to lost jobs.

The survey polled owners of nearly 900 New York City restaurants and bars. It found 76 percent said they would increase menu prices to offset increased expenses.

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