Examining the Minimum Wage Tip Credit Issue

A Legislative Column From Assemblywoman Mary Beth Walsh (R,C,I,Ref-Ballston)

Gov. Cuomo’s proposed elimination of the minimum wage credit for tipped workers, a plan that seems to have found significant opposition from all the parties it claims to benefit, appears to be a solution in search of a problem.

Over the past month, the Commissioner of Labor has held a series of public hearings across the state to discuss this controversial measure. The results have been eye opening, as countless tipped workers, business owners and patrons have all expressed concerns with the potentially negative impacts of tinkering with the current system. Servers fear that they will lose out on their tips, which often greatly exceed the minimum wage they would receive under this proposal. Restaurateurs and customers fear the ensuing price increases that the governor’s plan would require, with some even considering cutting paid positions or eliminating tipping altogether.

Proponents of the governor’s plan claim it as a major victory for worker’s rights, and a much needed amendment to a practice that allows employers to underpay their workers. However, this is not the case. Under current law, if an employee’s tips do not add up to minimum wage, the employer is required to cover the difference. By eliminating this credit, we would essentially be capping the amount of money these individuals can make at minimum wage, the amount they are already guaranteed, while adding considerable impediments to their ability to earn additional income. Maine actually attempted to eliminate this credit, and was forced to repeal the measure last year after it had proven ineffective.

In today’s system, tipped workers are among the highest paid employees in the restaurant and hospitality industry. The minimum wage tip credit ensures that these hardworking men and women are guaranteed to make at least the state’s minimum wage, while rewarding those who are willing to go above and beyond in their service, as well as employees working higher volume shifts on weekends and holidays.

I had the honor of standing alongside Saratoga County officials, tipped workers and restaurant owners to voice our concerns with this misguided proposal during a press conference at Longfellow’s Restaurant in Saratoga Springs last month. While it was certainly concerning to hear such strong opposition from the very people that this plan claims to benefit, the event was also a great testament to both the strength of our region, and our business community’s willingness to unite in defense of its employees best interests. Saratoga Springs, a city known for its tourism, culture and great restaurants, is just outside of the 112th Assembly District, but the county as a whole and surrounding areas of the Capital Region also rely heavily on these tipped wages.

I urge anyone interested in joining this conversation to join us in attending the upcoming Capital Region public hearing in Albany’s Legislative Office Building Hearing Room B on Friday, May 18 at 10 a.m. Let’s work together to ensure the voices of our region’s tipped workers and business owners are heard, and this misguided proposal is defeated.