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State Raises Minimum Wage for Tipped Workers

Host Intro 1: The servers in New York City restaurants might finally be able to make a little more money.  The City announced last month that the minimum wage will be raised from $5.00 to $7.50 by the end of the year.

Host Intro 2: Many restaurant owners are not happy with the hike, saying it will raise labor costs and menu prices.  As Nardos Mesmer reports, some are even considering changing the way servers are tipped.


Taylor Ott, has been waiting tables for about four years. She says the flexible hours work for her.

Taylor Ott: It makes it so that you can make some money in reasonable amounts of hours so you can still try to pursue this other part of your life.

The current minimum wage for tipped workers in NYC is $5.00 an hour. However, their real take home pay depends on tips. Without those tips, Ott says it wouldn’t be worth it for her.

Taylor Ott: It’s how we live.

The New York Wage Board is increasing the minimum wage for tipped workers, raising it from $5 an hour to $7.50 an hour by the end of the year. Stephanie Thompson, studies wage compensation at Cornell University. She says working for tips is good on the good nights.

STEPHANIE THOMAS: On the other hand if it’s a slow night and you’re not making tips your customers don’t leave you what you expect them too then obviously you’re going to have a lower level of earnings.

It’s this feast or famine that made the State’s Acting Labor Commissioner, Mario Musolino increase in the city’s minimum wage for tipped workers. Some restaurant owners are concerned about the hike, saying when you raise the minimum wage you raise the cost associated with running a business. Chris Hickey represents NYC in the States Restaurant Association. He says the December 31st deadline is too soon and many restaurants are still trying to figure it out how to adjust for the change. It’s $2.50 more, per server, per hour.

CHRIS HICKEY: It doesn’t give business time to adjust to any of the changes. They have really less than a half of a year to look at everything and possibly change they way they run things.

To make up the difference, restaurant owners are considering raising menu prices; cutting workers and more recently, some are getting rid of tipping all together. They’re using an administrative fee instead like Amanda Cohen, owner of the posh vegetarian restaurant Dirt Candy. Chris Hickey says it really depends on your business model.

CHRIS HICKEY: We love Amanda Cohen at Dirt Candy. She’s really awesome and she’s so vocal about her no-tipping policy and I think really trying to set the standard and I think that’s where the restaurants are moving towards, the no-tipping policy.

No tipping restaurants with administrative fees can provide equal tips to all employees. The fee allows owners to provide servers and kitchen staff with equal tips. However, it takes away their opportunity to earn their own tips. Stephanie Thomas at Cornell says the only way to really achieve a fair wage is to get rid of the distinction between tipped and non-tipped workers.

STEPHANIE THOMAS: I think we need equality between those two minimum wages and there shouldn’t be separate ones if we’re not going to tip.

Seven states including California and Washington have made minimum wage equal for all wage workers. But New York is not there yet. For now, the wage increase goes into effect December 31st.

Nardos Mesmer, Columbia Radio News.


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