Assemblywoman Jenne Shares Concerns About Tipped Wage Proposal

April 24, 2018

Assemblywoman Addie A.E. Jenne has issued the following statement ahead of a hearing scheduled for 10 a.m. Wednesday at the Dulles State Office address the possibility of ending minimum wage tip credits in New York State, also known as the subminimum wage.

This proposal would eliminate the subminimum wage.

Hearings will be presided over by State Labor Commissioner Roberta Reardon and will be focused on the scope of the problem. Preregistration is necessary.

Here is the statement from Assemblywoman Jenne:

I have serious concerns about the economic impact of the proposal to eliminate the minimum wage tip credit.

I support efforts to make sure workers in New York State are fairly compensated for their work, but I am concerned the current proposal is too aggressive and its main consequence will be a loss of jobs when restaurants in places like the North Country are forced to increase menu prices and make people re-evaluate how often they go out to a restaurant to eat.

The tipped workers I have been speaking to tell me they earn an hourly rate, with tips included, considerably higher than the minimum wage. Having worked in restaurants for years myself, I know this is the case for many tipped workers.

Wages and tips are reported to the state on a regular basis, and it should be easy for state authorities to determine if restaurants are using the tipped wage credit inappropriately because they operation is more like a fast food restaurant instead of a sit down restaurant.

The broad proposal being discussed is aimed at addressing those establishments that are bad actors, but it will unfortunately ensnare establishments that create an environment that supports living wage tipped positions by undermining their business model.

It makes no sense to make changes that will result in major cost shifts in a short period of time for those businesses that we know meet and exceed the state's minimum wage due to their payroll filings.

The state needs to stop letting bad businesses undermine good businesses and policies.

Mechanisms currently exist to force those businesses abusing the tipped wage system to stop, and those that consistently report their tipped staff earn the minimum wage or more on average should be allowed to continue using the current tipped wage credit.

There are ways to ensure tipped workers earn a living wage within the existing system, and we need to work with this business sector to enhance pay and worker protections while being sensitive to their business model.

Bringing common sense to this issue will ensure the viability of restaurants in parts of our state that are economically depressed or depend on tourism and good weather for business.

The jobs these establishments provide fill the need of many working families for extra money as a second job, offer flexible hours for those raising children or caring for other relatives and for students trying to pay for college.

In the North Country, our restaurants sometimes provide one of the few employment opportunities available in communities after retail or seasonal attractions close at the end of the tourism season.

I urge the state to craft a more thoughtful approach to curb the abuse of the tipped wage credit and to work with the industry to create reasonable wage targets in line with the minimum wage scheduled increases that, if met, would entitle a business to continue use of the tip credit.