thereisnospoon
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Libs...When WILL they learn?
The NY State Labor Commission is considering the elimination of the so called "tip credit".
A modified pay structure that calculates the difference between minimum wage and the actual hourly wage of those workers who gain the majority of their income through gratuities.
Read courtesy of the NY Post..
Please note that this is an opinion piece.
By Andrew Rigie
October 15, 2014 | 9:43pm
Photo: Shutterstock
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The culture of tipping ingrained in the American culture is coming to a boiling point in New York City.
To help create jobs for New Yorkers while reducing operating costs for the restaurant industry, state law allows employers to take a “tip credit” against the minimum wage.
Here’s how it works: Restaurants currently pay tipped workers a base wage of $5 an hour. An employee’s tips are then added to the base wage. If that sum is less than the minimum wage, the law requires the employer to pay the difference — a fact that many activists leave out when falsely suggesting that tipped restaurant workers are earning a sub-minimum wage.
The truth is that thousands of tipped restaurant workers are not just making the minimum wage; they’re making more than $20 an hour, according to a survey conducted by the NYC Hospitality Alliance.
But this could soon change. A well-organized campaign to eliminate the tip credit may backfire, cutting the incomes of thousands of tipped restaurant employees, reducing the workforce and the number of good-paying restaurants in New York City.
A Wage Board appointed by state Labor Commissioner Peter Rivera is charged with reviewing and making recommendations to modify the $5 per hour “tipped wage.” And there is political pressure to eliminate the tip credit altogether.
If the tip credit is eliminated, then labor costs to employ restaurant servers would nearly double. Local jobs and both new and existing restaurants would be placed on the chopping block.
The situation becomes even more precarious for restaurant owners if next year the state Legislature passes the proposal to allow New York City to raise the minimum wage to more than $13 per hour.
The combined loss of the tip credit and a $13 minimum wage is equal to a 160 percent hike in labor costs to employ tipped workers. Such an increase is unprecedented — and would come on top of other new employer-funded mandates, such as paid sick leave and ObamaCare.
While celebrity chefs might be all over reality TV, the reality for a huge number of restaurant owners — faced with some of the nation’s highest rents and operating costs — is that too many are just scraping by with single-digit profit margins, if there are any profits at all.
Restaurateurs don’t believe the dining public will pay the higher menu prices required to offset these increased wage and benefit mandates. And cutting their workforces to afford the increased labor cost could undermine operations, compromising the quality of service that customers receive.
So with limited options, other than hiring freezes or layoffs, dozens of the city’s most beloved restaurants are considering eliminating tipping to save jobs and their restaurants.
In lieu of customers leaving a voluntary gratuity, restaurant checks would include an automatic 15 percent to 22 percent “administrative fee” — about what most customers now leave as tips.
This fee would cover the cost of the employer’s loss of the tip credit — but it would fund an hourly wage rate less than what many employees now earn in tips plus base wages.
The result: Thousands of hard-working New Yorkers would keep their jobs, but with considerably lower incomes.
There are many variables here and no certain outcomes. The only thing that’s certain right now is that the restaurant industry needs Gov. Andrew Cuomo and Labor Commissioner Peter Rivera to extend some hospitality by not eliminating or significantly modifying the tip credit.
Andrew Rigie is the executive director of the New York City Hospitality Alliance, the main industry group for the city’s restaurants and nightlife establishments.
The NY State Labor Commission is considering the elimination of the so called "tip credit".
A modified pay structure that calculates the difference between minimum wage and the actual hourly wage of those workers who gain the majority of their income through gratuities.
Read courtesy of the NY Post..
Please note that this is an opinion piece.
By Andrew Rigie
October 15, 2014 | 9:43pm
Photo: Shutterstock
MORE ON:
RESTAURANTS
Media moguls' dreams come true with new restaurant
TripAdvisor unveils questionable restaurant rankings
Le Bernardin adds gold-star facility Privé
Legendary bartender starts his first-ever residency at Mark Hotel
The culture of tipping ingrained in the American culture is coming to a boiling point in New York City.
To help create jobs for New Yorkers while reducing operating costs for the restaurant industry, state law allows employers to take a “tip credit” against the minimum wage.
Here’s how it works: Restaurants currently pay tipped workers a base wage of $5 an hour. An employee’s tips are then added to the base wage. If that sum is less than the minimum wage, the law requires the employer to pay the difference — a fact that many activists leave out when falsely suggesting that tipped restaurant workers are earning a sub-minimum wage.
The truth is that thousands of tipped restaurant workers are not just making the minimum wage; they’re making more than $20 an hour, according to a survey conducted by the NYC Hospitality Alliance.
But this could soon change. A well-organized campaign to eliminate the tip credit may backfire, cutting the incomes of thousands of tipped restaurant employees, reducing the workforce and the number of good-paying restaurants in New York City.
A Wage Board appointed by state Labor Commissioner Peter Rivera is charged with reviewing and making recommendations to modify the $5 per hour “tipped wage.” And there is political pressure to eliminate the tip credit altogether.
If the tip credit is eliminated, then labor costs to employ restaurant servers would nearly double. Local jobs and both new and existing restaurants would be placed on the chopping block.
The situation becomes even more precarious for restaurant owners if next year the state Legislature passes the proposal to allow New York City to raise the minimum wage to more than $13 per hour.
The combined loss of the tip credit and a $13 minimum wage is equal to a 160 percent hike in labor costs to employ tipped workers. Such an increase is unprecedented — and would come on top of other new employer-funded mandates, such as paid sick leave and ObamaCare.
While celebrity chefs might be all over reality TV, the reality for a huge number of restaurant owners — faced with some of the nation’s highest rents and operating costs — is that too many are just scraping by with single-digit profit margins, if there are any profits at all.
Restaurateurs don’t believe the dining public will pay the higher menu prices required to offset these increased wage and benefit mandates. And cutting their workforces to afford the increased labor cost could undermine operations, compromising the quality of service that customers receive.
So with limited options, other than hiring freezes or layoffs, dozens of the city’s most beloved restaurants are considering eliminating tipping to save jobs and their restaurants.
In lieu of customers leaving a voluntary gratuity, restaurant checks would include an automatic 15 percent to 22 percent “administrative fee” — about what most customers now leave as tips.
This fee would cover the cost of the employer’s loss of the tip credit — but it would fund an hourly wage rate less than what many employees now earn in tips plus base wages.
The result: Thousands of hard-working New Yorkers would keep their jobs, but with considerably lower incomes.
There are many variables here and no certain outcomes. The only thing that’s certain right now is that the restaurant industry needs Gov. Andrew Cuomo and Labor Commissioner Peter Rivera to extend some hospitality by not eliminating or significantly modifying the tip credit.
Andrew Rigie is the executive director of the New York City Hospitality Alliance, the main industry group for the city’s restaurants and nightlife establishments.
