The State Labor Department has approved a wage increase for tipped workers, who will earn a minimum of $7.50 per hour. Currently restaurant servers, hotel housekeepers and other employees who rely on tips earn about $5 an hour, well below the state minimum wage of $8.75. Last month, the state's wage board recommended the increase—the first increase offered to tipped workers in four years.
New York City's minimum may be as high as $8.50 an hour, thanks to Governor Cuomo's proposal that the city be able to raise its own minimum. "No one who works a full time job should be forced to live in poverty, and that is why we must also increase the State’s minimum wage, not just for tipped workers but for all hard-working New Yorkers and we must do it this year," Cuomo said in a statement today.
Unsurprisingly, this steep increase will have an effect on the restaurant and hospitality industry, though the extent of it remains to be seen. Some restaurants are considering eliminating tipping altogether in favor of higher wages. Some say they may have to cut waiters' hours. Many expect menu item prices will increase. "Tipped workers make their living on tips, not hourly wages," Brad Rosenstein, owner of Jack's Oyster House in Albany, told the Associated Press. "It's just a question of time before inflation hits the restaurant industry. It's becoming harder and harder to operate a restaurant in New York state."
The Labor Department says the new minimum wage will be in place on December 31st.