Restaurant wait staff and other tipped workers in New York will earn $7.50 an hour before tips effective Dec. 31, after the state’s acting labor commissioner approved the increase on Tuesday.
Servers in New York currently earn $5 per hour, compared with a non-tipped minimum wage of $8.75. The state allows businesses to use tips to meet or pass the minimum wage.
In New York City, the tipped wage will rise to $8.50 an hour if the city gets permission to raise its minimum wage above the state's rate.
“This drastic 50-percent increase in labor cost is sure to have a significant impact on the economic viability of many restaurants and force the restaurant industry to consider various new operational and compensation models for tipped employees,” the New York City Hospitality Alliance said in a statement.
New York Gov. Andrew Cuomo’s acting state labor commissioner, Mario Musolino, approved the tipped wage increase. The state’s minimum wage for hourly workers is scheduled to rise to $9 an hour at the end of the year.
"The sweetest success is shared success, when we all do well together," Cuomo said Tuesday at a Manhattan labor rally, according to the Associated Press. “We want businesses to do well. Let's share with the workforce. Let’s all rise together. That's what New York has been about. That's what this nation is all about.”
However, the New York State Restaurant Association accused Musolino, who made the recommendations to the governor, of “rubberstamping” the minimum wage increase for wait staff.
Melissa Fleischut, president and CEO of the association, said nearly 1,000 representatives of the hospitality industry had asked Musolino and the wage board to phase in a moderate wage increase over time.
The wage board recommended, and Musolino approved, a 50-percent increase to be phased in by the end of this year.
"By rubberstamping an extreme, unprecedented, 50-percent increase, it becomes hard to believe New York is really 'Open for Business,’” Fleischut said, referring to the state’s marketing slogan to attract businesses.
Saru Jayaraman, a founder of ROC United, which has been pushing for increased minimum wages across the nations, said in a statement that “although ROC will continue to fight for One Fair Wage, we are thrilled that New York state will have the ninth-highest state wage for tipped workers in the country, with $7.50 an hour.”
Retailer Walmart said Thursday that it would raise wages to $9 an hour in April, and then $10 an hour in a year, an increase that would affect 40 percent of its workforce. That moved raised speculation that McDonald’s Corp. and other large restaurant companies would be pressured to follow suit.
New York has more than 200,000 tipped minimum wage workers, and some sources put the number of restaurant workers in that category at 133,550. The median income of New York’s wait staff is about $19,103.
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