Latest York restaurant owners have a tip for lawmakers: don’t change the foundations about wait staff gratuity.
A whopping 95% of restaurateurs oppose a legislative campaign to eliminate the tip credit system that permits owners to pay wait staff who earn suggestions lower than minimum wage, in accordance with a latest survey by the NYC Hospitality Alliance set to be released Monday.
Some owners said the change could lead on to higher menu prices, staff layoffs — and will even threaten their businesses very existence.
“It’s clear Latest York’s restaurants and bars rely on the tip credit,” said Andrew Rigie, executive director of the NYC Hospitality Alliance.
“There’s no reason for the state’s elected officials to upend the working model of Latest York’s restaurant industry and put small businesses and jobs on the chopping block, while making it far more expensive for Latest Yorkers and visitors to dine out within the Empire State,” Rigie said.
The survey or 879 restaurants, conducted in December, found that 97% of restaurants were extremely or somewhat concerned about eliminating the tip credit, with 88% saying it might be a disaster for his or her business.
Some 76% of restauranteurs said they’d increase menu prices to offset the large increase in expenses in the event that they needed to pay staff the $16 minimum wage and 42% would also consider eliminating tipping altogether to maintain the general cost down for purchasers as much as possible.
Two-thirds of eatery owners said they’d must slash the variety of employees they employ — as what happened when the District of Columbia ended the tip credit.
Greater than half of the restaurateurs — 54% — said they consider closing shop.
With the survey’s fundings, the Hospitality Alliance issued a report that said eliminating the tip credit would raise costs for restaurants and bars just as they’re beginning to get well from the COVID-19 pandemic shutdowns and restructions.
The report also notes that restaurants were hit by post-pandemic inflation and distant work.
If the tip credit is eliminated, it can cost about $12,000 more to employ a full-time tipped worker per 12 months, the report estimated.
Under current law, restaurant employers in NYC may pay employees who customarily receive suggestions a base wage of $10.65 per hour if that wage combined with their suggestions equals or exceeds $16 per hour, the present minimum wage.
The $5.35 differential is the “tip credit” for the service industry.
If the $10.65 base wage and the combined suggestions equals lower than $16 per hour, the employer is required by law to pay the worker the difference.
Restaurant servers often make way more — upwards of $20 to $40 an hour with suggestions, the report said.
The Hospitality Alliance opposes laws pushed by Assemblywoman Jessica Gonzalez-Rojas (D-Queens) and Sen. Robert Jackson (D-Manhattan) that might abolish the “tip credit” and have wait staff paid $17 an hour by 2026 if employed in town, Long Island and Westchester, and be paid the minimum wage by 2027.
Gonzalez-Rojas said in her memo backing the bill, co-sponsored by 35 other Democrats, that current system creates inequities amongst employees.
“Reliance on suggestions has also created an environment where employees are victimized, and in some cases, encouraged to show a blind eye, to rampant discrimination and sexual harassment by clientele and managers. This ends in annual restaurant worker sexual harassment claims to the EEOC at five times the speed of other industries, ” the assemblywoman said.
Employers wouldn’t be prohibited from allowing for restaurant gratuities, but tip would now not make up the difference between wages received from the restaurant and the actual minimum wage, she said.
Her bill would also allow tip sharing between wait staff and “back of house” roles, similar to cooks and dishwashers, and those that don’t receive suggestions.
