New York raises wage for tipped workers

Restaurant servers, hotel housekeepers and other tipped workers in New York State will soon make $7.50 an hour before tips, a big raise for thousands of workers and a significant increase in labor costs for business owners.

Like most states, New York allows businesses to pay tipped workers less than the state’s minimum wage as long as tips make up the difference. Currently, servers in New York make $5 per hour, compared to a minimum wage of $8.75.

The increase will take effect Dec. 31. 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.

But restaurant owners warn the higher labor costs will force them to raise menu prices, reduce hours for workers, or close altogether.

The increase was approved by Gov. Andrew Cuomo’s labor commissioner as states across the country debate increases in the minimum wage, which is set to go to $9 an hour in New York at year’s end. Cuomo, a Democrat, is calling to increase the figure to $10.50 statewide and to $11.50 in New York City. Mayor Bill de Blasio is seeking authority to raise his city’s wage to $13.

Seven states including California have abolished the tipped wage altogether, meaning service employees are paid at least the minimum wage before tips.