New York City Tipped Workers to Get Big Raise End of Year

Workers receiving tipped wages–which are traditionally well below the minimum wage–are getting a big boost from Governor Andrew Cuomo.  Last month, he and labor commissioner Mario Musolino announced and approved the measure to increase the rate to $7.50 per hour.  Tipped wages, which range from $4.90 to $5.65 currently, will be reclassified into one single category given the $7.50 rate come the end of 2015.

The governor and commissioner spoke before labor leaders at a union hall in Manhattan to celebrate the change.  Cuomo used the time to call for further increase–the governor is proposing a $10.50 per hour minimum wage for non-tipped employees.  Currently, the minimum is $8.75 and is set to increase to $9 at the end of the year.

The changes are welcomed by employees as the income gap widens and is more widely recognized.  At $9/hour, the pre-tax annual income would be approximately $18,000–too little to “raise a family, pay for rent and food and insurance and health care… in the city of New York,” Cuomo said.

Not everyone is welcoming the change, however.  The New York State Restaurant Association points out that this effectively increased payroll by 50 percent.  Chris Hickey, regional director for the NYSRA, pointed out that the increase “is going to hit small businesses the hardest.”  Amanda Cohen, chef of Dirt Candy, added that restaurants “are going to have to raise their prices or go to a new tipping model.  My guess is that restaurants are going to have to raise their prices and be honest about it and say this is what it costs to operate this business.”

To read more on the increase, click here.