New York Lawmakers Leaves Service Staff Without Minimum Wage Adjustment

05/23/2013 // Keller Grover LLP // Eric Grover // (press release)

As millions of New Yorkers are waiting on their minimum wage bump, there is one group of workers who will not see an increase in their paychecks: workers who derive much of their income from tips. Officials confirmed last month that those who receive most of their income from tips will not be included in a deal to increase the state’s minimum wage to $9 per hour, reports Los Angeles employment lawyer Eric Grover.

In the state of New York, tipped employees receive a base pay ranging from $4.90 to $5.65 an hour, depending on the job they hold. If these workers don’t receive sufficient tips to raise their earnings to the minimum wage of $7.25 an hour, the employer has to compensate the employee for the difference, the state Labor Department explained.

Under the deal reached by legislators to increase the state’s minimum wage, those workers that rely tips for a portion of their income have been overlooked, leaving many working for less than the minimum wage when business is slow if this law takes effect.

But not everyone agrees with the new measure. Saru Jayaraman, co-founder of Restaurant Opportunities Centers United, a Manhattan-based advocacy group for eatery workers said, “Excluding tipped workers from the proposed plan is a huge oversight and ignores the needs of millions of New York workers,” Newsday reported. She further posits that a significant number of these workers are single moms struggling to raise their families often at restaurants that don’t foster the higher tip rates customary in a fine dining establishment.

Restaurant Opportunities and the NY Minimum Wage Coalition also held a rally on Twitter to push state leaders to reopen the wage deal. The supporters of the legislation contend that restaurant servers make more than minimum wage when tips are taken into account, so they don’t believe that this is an issue for that group of workers.

However, according to data from the Labor Department, “nearly half of the 180 federal court orders for wage violations nationwide from Oct. 1, 2011, through Sept. 30, 2012, involved eateries in Nassau and Suffolk counties. About 22,000 Long Islanders were employed as waiters and waitresses in early 2012. It would appear from these statistics that restaurateurs are not stepping up to the plate and making up the difference when tips fall short.

“As New York moves to include this provision under their deal to boost the state’s minimum wage, other states could soon adopt the same policy,” says Grover, a LA employment lawyer at Keller Grover LLP. “Those in the service industry should be prepared because New York does not see waiters and other tip-based positions as minimum-wage workers, because of the tips they collect. Other states, like California, could soon follow in their legislative footsteps.”

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