What's happening
This bill raises the minimum cash wage for tipped food service and service workers in New York, phasing in increases until 2024.
Why it matters
Significantly raises the base pay for tipped workers. By phasing in substantial increases to the minimum cash wage that must be paid directly by employers (regardless of tips), the bill aims to reduce tipped workers’ reliance on unpredictable tips and provide a more stable income floor.
Ensures parity with standard minimum wage by 2024. After 2024, tipped food service and service workers will be entitled to the same minimum wage as non-tipped workers, effectively eliminating the lower "tipped minimum wage" and addressing longstanding wage equity concerns in the service industry.
Limits employer discretion and regulatory workarounds. The bill explicitly restricts the state labor commissioner from setting a tipped wage below the statutory minimum, closing loopholes that previously allowed wage boards or regulatory orders to keep tipped wages lower than the standard minimum wage.
May impact restaurant business models and labor costs. By raising the cash wage floor, especially in high-density service sectors like restaurants and hospitality, the bill could lead to higher labor costs for employers, possible menu price adjustments, and changes in tipping culture—potentially affecting both workers and consumers.
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Headline styles
Raise Minimum Wage for Tipped
Plain English, a few words. Used as the page title.
Sponsors
History
- Recommit, enacting clause stricken
- Referred to labor
- Referred to labor
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
Raise Minimum Wage for Tipped Workers
In Assembly Committee · Labor · Sponsor Ellen C. Jaffee
Full text
3 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
1760
2019-2020 Regular Sessions
IN SENATE
January 16, 2019
Introduced by Sen. RAMOS -- read twice and ordered printed, and when printed to be committed to the Committee on Labor
AN ACT to amend the labor law, in relation to the minimum wage
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Subdivision 2 of section 652 of the labor law, as amended by chapter 38 of the laws of 1990, is amended to read as follows:
2. Existing wage orders. The minimum wage orders in effect on the effective date of this act shall remain in full force and effect, except as modified in accordance with the provisions of this article.
Such minimum wage orders shall be modified by the commissioner to increase all monetary amounts specified therein in the same proportion as the increase in the hourly minimum wage as provided in subdivision one of this section, including the amounts specified in such minimum wage orders as allowances for gratuities, and when furnished by the employer to its employees, for meals, lodging, apparel and other such items, services and facilities, except that the hourly cash wage for food service workers and service employees who receive tips shall not be less than the cash wage as provided in subdivision four of this section and the maximum credit for tips in minimum wage orders shall be modified so that such credit, when combined with this cash wage, is equal to the minimum wage. All amounts so modified shall be rounded off to the nearest five cents. The modified orders shall be promulgated by the commissioner without a public hearing, and without reference to a wage board, and shall become effective on the effective date of such increases in the minimum wage except as otherwise provided in this subdivision, notwithstanding any other provision of this article.
§ 2. Subdivision 4 of section 652 of the labor law, as amended by section 2 of part K of chapter 54 of the laws of 2016, is amended to read as follows:
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD04774-01-9
S. 1760 2
4. Notwithstanding subdivisions one and two of this section, the wage for an employee who is a food service worker receiving tips shall be a cash wage of at least two-thirds of the minimum wage rates set forth in subdivision one of this section, rounded to the nearest five cents or seven dollars and fifty cents, whichever is higher, provided that the tips of such an employee, when added to such cash wage, are equal to or exceed the minimum wage in effect pursuant to subdivision one of this section and provided further that no other cash wage is established pursuant to section six hundred fifty-three of this article, except that any cash wage established pursuant to section six hundred fifty-three of this article shall not be less than the cash wage established by this subdivision.
(a) Notwithstanding subdivisions one and two of this section and section six hundred fifty-three of this article, the wage for an employee who is a food service worker or service employee receiving tips and paid in accordance with Part 146 of Title 12 of the New York state compilation of codes, rules and regulations shall be, for each hour worked in the city of New York, a cash wage of not less than:
$9.00 per hour on and after December 31, 2019;
$10.50 per hour on and after December 31, 2020;
$12.00 per hour on and after December 31, 2021;
$13.50 per hour on and after December 31, 2022;
$15.00 per hour on and after December 31, 2023. Beginning on December thirty-first, two thousand twenty-four, the cash wage payable to a food service worker or service worker under this paragraph shall be not less than the wage established pursuant to paragraph (a) of subdivision one of this section.
(b) Notwithstanding subdivisions one and two of this section and section six hundred fifty-three of this article, the wage for an employee who is a food service worker or service employee receiving tips and paid in accordance with Part 146 of Title 12 of the New York state compilation of codes, rules and regulations shall be, for each hour worked in the counties of Nassau, Suffolk and Westchester, a cash wage of not less than:
$8.00 per hour on and after December 31, 2019;
$9.50 per hour on and after December 31, 2020;
$11.00 per hour on and after December 31, 2021;
$13.00 per hour on and after December 31, 2022;
$15.00 per hour on and after December 31, 2023. Beginning on December thirty-first, two thousand twenty-four, the cash wage payable to a food service worker or service worker under this paragraph shall be not less than the wage established pursuant to paragraph (b) of subdivision one of this section.
(c) Notwithstanding subdivisions one and two of this section and section six hundred fifty-three of this article, the wage for an employee who is a food service worker or service employee receiving tips and paid in accordance with Part 146 of Title 12 of the New York state compilation of codes, rules and regulations shall be, for each hour worked outside the city of New York and the counties of Nassau, Suffolk and Westchester, a cash wage of not less than:
$8.00 per hour on and after December 31, 2019;
$9.25 per hour on and after December 31, 2020;
$10.50 per hour on and after December 31, 2021;
$11.50 per hour on and after December 31, 2022;
$12.50 per hour on and after December 31, 2023.
S. 1760 3
Beginning on December thirty-first, two thousand twenty-four, the cash wage payable to a food service worker or service worker under this paragraph shall be not less than the wage established pursuant to paragraph (c) of subdivision one of this section.
§ 3. Subdivision 2 of section 653 of the labor law, as added by chapter 14 of the laws of 2000, is amended to read as follows:
(2) The commissioner shall, within six months after enactment of any change in the statutory minimum wage set forth in subdivision one of section six hundred fifty-two of this article, appoint a wage board to inquire and report and recommend any changes to wage orders governing wages payable to food service workers. Such wage board shall be established consistent with the provisions of subdivision one of section six hundred fifty-five of this article, except the representatives of the employees shall be selected upon the nomination of the state American Federation of Labor/Congress of Industrial Organizations; and provided, further, that the representatives of the employers shall be selected upon the nomination of the New York State Business Council. [Any wage order authorizing a lesser wage than the previously and statutorily mandated minimum wage for such employees shall be reviewed by the wage board to ascertain at what level such wage order is sufficient to provide adequate maintenance and to protect the health and livelihood of employees subject to such a wage order after a statutory increase in the mandated minimum wage.] Notwithstanding section six hundred fifty-five of this article, a wage order under this subdivision shall not authorize a lesser wage than the previously and statutorily mandated minimum wage for such employees.
§ 4. This act shall take effect immediately.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the labor law, in relation to the minimum wage
Purpose
To eliminate the sub-minimum wage for food service workers and service employees who receive tips
Summary of provisions
Section one of this bill amends Subdivisions 2 and 4 of section 652 of the Labor Law to provide that the hourly cash wage for food service workers and service employees who receive tips shall be no less than the cash wage for all other workers under Section 652 of the Labor Law, and the underlying minimum wage orders shall be adjusted to reflect such change.
Read the full memo (651 words)
It further provides that food service workers and service employees who receive tips covered under pre-existing administrative regulations would see an increase in the minimum wage rate, increasing to $15/hr by the end of 2023 in New York City and the three suburban counties (Nassau, Suffolk and Westchester), and $12.50/hr by the end of 2023 in the rest of the state with future increases to $15/hr set by administrative implementation. Once fully implemented, the tipped worker minimum wage would be identical to the minimum wage for all other workers in 2021 and beyond.
Section two amends Subdivision 2 of section 653 of the Labor Law as added by chapter 14 of the Laws of 2000 related to food service worker wage orders to provide that a wage order under this subdivision shall not authorize a wage less than the previously and statutorily authorized minimum wage.
Section 3 provides that the act shall take effect immediately.
Justification
For many years, employers of food service employees have been provided with a credit that reduces the hourly minimum wage paid to employees receiving gratuities. These employers now pay $7.50 per hour to workers, so long as workers receive on average the difference between their reduced minimum wage and the statutory minimum wage in tips.
Allowing for the tip credit has created many inequities in food service work. Employees who are not made whole by gratuities face arduous legal processes to recover their owed wages, involving complicated record- keeping and inadequate legal remedies. Reliance on tips has also created an environment where workers are victimized, and in some cases, encouraged to turn a blind eye, to rampant discrimination and sexual harass- ment by clientele and managers. This results in annual restau- rant employee sexual harassment claims to the EEOC at five times the rate of other industries.
Eight states (Alaska, California, Maine, Minnesota, Montana, Nevada, Oregon, and Washington) have eliminated the tipped credit and required employers to pay the full minimum wage to employees. Those states have seen growth in the restaurant industry and a more equitable and experi- enced work force.
New York's two-tiered wage system presents challenges for employers as well as workers. Unlike many other laws, wage and hour laws put the onus on employers to keep accurate records and follow the law, which take up large amounts of time and money in monitoring compliance. This includes the '80-20 Rule' where employers are supposed to ensure that tipped workers perform no more than 20 percent of work that is not related to direct service. Maintaining the necessary records and compliance of a two-tiered wage system expose employers to additional liability.
In short, it is time for New York to join other states and improve the working conditions in the restaurant industry by eliminating the sub-mi- nimum wage. Employers would not be prohibited from allowing for restau- rant gratuities, but gratuities would no longer make up the difference between wages received from the restaurant and the actual minimum wage.
Providing equity and fairness to restaurant workers would help reduce the wage gap and bring New York in line with many of its sister states in workers' rights and fairness on the job.
Legislative history
2017-2018-S.4405-A Referred to Labor Committee
Effective date
This act shall take effect immediately.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.