New York has already raised the minimum wage for 2015. There is now a proposed plan to increase the hourly tipped wage to $7.50 per hour beginning in December 2015, double the current hourly pay rate of servers. Tipped wages have been "too low" for New York workers said Governor Cuomo while backing this initiative during a interview in January.
Labor advocates have argued that the current tipping wage keeps groups who dominate in tipped industries, such as women and minorities, in poverty. Restaurant owners, especially in New York City, argue that higher wages may force them to make significant changes to the way they run their businesses.
While there are no guarantees this proposal will become a law, critics of the plan were able to submit objections up until February 20th. Already the New York State Restaurant Association has planned to object siting that this proposal, if passed, will lead to fewer hours for tipped workers and restrict a restaurant's ability to create jobs. The association called the recommendation " a major blow to New York restaurants". Some restaurants could shift to a no-tipping policy, if the higher wage is enacted as well.
While New York is trying to solve this issue, the debate is echoed on a national level where tipped workers earn even less than those who work in New York. New York's tipped wage is currently $5 an hour, about 43% lower than the state's minimum wage which is $8.75 per hour. The federal tipped wage is even lower, $2.13 per hour.
Restaurateurs believe that the higher tipped wage will mean they'll have to cut back on servers, potentially hurting service.
"I wouldn't be able to have as many waiters as I have here because if I'm overstaffed, the cost is so enormous that it's going to hit me financially. So by default, all of a sudden, I'm going to be understaffed, and the quality of my service is going to go down."
- lili executive chef Philippe Massoud
It is unclear if patrons or businesses will actually suffer if and when the tipped wage disappears. According to the advocacy group Restaurant Opportunities Centers United, there are 148 restaurants nationwide that pay their workers more than the regular and tipped wage plus offer benefits such as paid sick days and parental leave. That's three times as many as there were in 2012.
Some restaurants have eliminated tipping altogether. There are hordes of countries that do not have customary tipping and still manage to produce great food and good service. Only time will tell exactly how this debate will play out. What do you think? Should tipped workers make a higher hourly wage? Or should the practice of tipping be phased out completely? Let us know in the comments section below.