In recent months, New Yorkers were repeatedly reminded that the minimum wage was going up.
“Thanks to New York State, the $15 minimum wage will be here for just about everyone in New York City on December 31, 2018!” the state Department of Labor tweeted in December.
“Starting Dec. 31, just about everyone in New York City will be making $15 an hour,” the actress La La Anthony enthused in a video commercial for the state.
“First state to pass $15 – the highest minimum wage,” Gov. Andrew Cuomo crowed during his 2019 State of the State address.
But despite the rhetoric, many New York residents still do not benefit.
That’s because there are exceptions to the $15 minimum wage – both in the planned rollout of the higher wage across the state and permanent caveats in the law. As designed, the $15 minimum wage only took effect for large employers in New York City at the end of last year. Smaller employers and those in the suburbs and upstate won’t see a $15 minimum wage for another year or more.
There are also exceptions for some workers who receive tips – although they still are supposed to earn the same minimum wage as everyone else. In those cases, an employer is allowed to claim a certain portion of the minimum wage as a “tip credit” that assumes the worker will take home that much or more in tips. Often those are servers or bartenders, but the tipped minimum wage extends beyond the restaurant industry. An employer can claim the tip credit when the occupation is one in which tips have customarily been given, and if they can prove that their employees make at least a certain weekly threshold in tips.
If the employee doesn’t make the required amount in tips, the employer is required to pay the difference – even though that doesn’t always happen, according to Paul Sonn, state policy program director at the National Law Employment Project. “These other industries are really sweatshop jobs,” he said. “Most of the data suggests that they are barely making the minimum wage, even after counting tips, and in many cases less, because there's so much non-compliance.”
Whether or not employers comply with the state wage requirements, the tipped wage certainly isn’t confined to the restaurant industry. These are a few of the workers whose employers are not required to pay the $15 minimum wage yet, or who sometimes don’t, because of something like the tip credit.
Employees at small companies in New York City – For workers at companies of 10 people or fewer in New York City, the minimum wage is still $13.50. A hike scheduled for the end of this year, however, will kick it up to $15 per hour.
Employees on Long Island and in Westchester – Similarly, employees working on Long Island and in Westchester County will have to wait until 2021, when the minimum wage is set to reach $15. For now, minimum wage employees are still making $12 per hour.
Employees in the rest of New York state – For the rest of New York state, workers making the minimum wage will have to wait a little longer to hit $15. That wage is currently at $11.10 and is set to increase regularly until it reaches $15 – although the periodic increases after 2020 have yet to be determined.
Servers and bartenders – Many employers who take advantage of New York’s tip credit are restaurants, falling under the state’s Hospitality Industry Wage Order. Tipped employees working in restaurants – usually servers and bartenders – are subject to the same minimum wage based on the size and location of the establishment. For large employers in New York City where the minimum wage is $15, for example, employers can claim a $5 tip credit and pay employees only $10 in cash wages. In the parts of the state where the minimum wage is $11.10, employers can pay $7.50 in cash wages, claiming a tip credit of $3.60.
Hotel service employees – Most hotel service employees, including room attendants and bell persons, fall under New York’s Hospitality Industry Wage Order, too, but the tip credit that employers are allowed to claim is smaller. For large employers in New York City, for example, an employer must pay $12.50 in cash wages and can claim a tip credit of $2.50.
Food delivery workers – Food delivery workers do not qualify as food service workers. But as long as employers can demonstrate that their delivery employees make above the weekly tip threshold, that they customarily make $1.95 in tips per day, and that the employee doesn’t work in a non-tipped occupation for more than 2 hours – or 20 percent of their shift – per day, employers can claim the tip credit for their delivery workers.
Car wash attendants – Car wash attendants have often been brought up in the discussion of wage theft, so much so that New York City cracked down on regulating the industry in 2017. Still, large employers in New York City can claim up to $3.65 in tip credits, according to New York’s Minimum Wage Order for Miscellaneous Industries and Occupations.
Nail salon employees – Nail salon employees fall under the same wage order as car wash attendants, and as with car washes, the nail salon industry has undergone years of controversy over wage theft, causing Gov. Andrew Cuomo to launch an effort to recover wages and shut down bad actors in 2015.
Valet parking attendants – Documents from the state Department of Labor list valet parking attendants as an example of another occupation that falls under the state’s tipped wage rules for miscellaneous industries.
Golf or tennis instructors – New York also lists golf or tennis instructors as an example of an employee who could be tipped often and well enough to qualify as a tipped worker.
Airport personal service workers – Some companies that contract with airports claim the tip credit, Sonn says, including people to escort elderly or disabled passengers around airports in wheelchairs or golf carts.
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