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Governor Cuomo announced on Tuesday a tipped employee minimum wage increase to $7.50 from $5 an hour on Dec. 31 of this year. The increase was ordered by the acting labor commissioner and will consolidate three categories of tipped workers — whose minimum hourly wages range from $4.90 to $5.65 — into a single class to be paid at least $7.50 an hour. In New York City, the tipped wage will automatically go to $8.50 an hour if the city gets permission to raise its minimum wage above the state’s rate.
The Department of Labor accepted the following recommendations from the Wage Board:
- Uniform tip amounts and criteria for all tipped workers in the hospitality industry, so that the same rates apply to food service workers, service employees and service employees in resort hotels.
- Increase the tipped cash wage amounts from their current rates of $4.90, $5.00 and $5.65, which have not increased since 2011, to $7.50 per hour, effective December 31, 2015.
- If the Legislature enacts a separate minimum wage rate for New York City, then the cash wage for such workers must be increased by one dollar, effective on the date that suchseparate minimum wage rate for New York City takes effect.
- A review of whether the system of cash wages and tip credits should be eliminated.
Like most states, New York allows businesses to pay tipped workers less than the state’s minimum wage of $8.75 an hour, as long as tips make up the difference. This will be the first increase to tipped workers’ base wage since 2011.
While the new law does not take effect for another 10 months, businesses in New York with tipped employees should begin preparing to comply with the new wage increase.
Please contact GTM for more information at (518) 373-4111.
