At hearing, many tell state to keep tipped wage as is
WATERTOWN — At a lively and at times emotional hearing Wednesday, many restaurant workers told representatives from the Department of Labor the new state proposal to raise tipped workers wages could be detrimental to local business.
If the tipped wage credit was eliminated, they said, restaurants would have to cut staff, change the dining experience or even close.
“This is going to be detrimental to this area,” Maggie Raczynski, an Albany-area waitress who has rallied supporters on the Facebook page “Supporters of the Tip Credit in NY,” told the Times at the hearing in the Dulles State Building.
In New York, people in industries that traditionally receive tips — such as restaurant servers, car wash workers, and nail salon workers — can be paid $7.50 an hour, or less than minimum wage, so long as they receive a combination of tips and pay that reaches the state minimum. A proposal Gov. Andrew Cuomo made in December, however, would require businesses to pay tipped employees the minimum wage, which is currently $10.40 per hour.
Advocates for the wage change say the tip credit allows employers to pay lower than minimum wage. They also argue sub-minimum wages can lead to less overall pay for female and minority wait staff, and studies from groups like the Restaurant Opportunities Center suggest a link between a reliance by staff on tips and sexual harassment.
The decision on whether or not to change the wages is before the Department of Labor. To make a decision, Department of Labor Commissioner Roberta Reardon and other representatives have been holding hearings like Wednesday’s across the state.
Almost all the speakers in Watertown were restaurant managers, owners and servers who opposed eliminating the tipped wage credit, saying it would raise costs, forcing business owners to cut positions, deny back-of-the-house employees raises, and raise prices at the risk of losing customers.
“As a business owner, I support 62 families,” Stacey Carr, the first speaker at the hearing told the department of labor representatives. Under the new proposals, she said, servers would be stuck on smaller staffs.
“They may earn a similar wage, but they will have to work twice as hard,” Carr said.
Many speakers grew emotional in sharing their experience of working in restaurants, fearing that the business they had spent their working life in would be negatively impacted or even closed.
Caitlin Bailey said she had worked in the industry for 10 years in four different states. She returned to the area about 18 months ago to be closer to family and found a job at an Outback. Shortly afterwards, her father died unexpectedly.
“My restaurant was amazing to me,” she told the Department of Labor representatives during her testimony, during which she paused to regain control of her emotions. “They prayed with me, and they brought me and my family all food when we were in the hospital, the day my father died.”
Like many people, Bailey felt that the tipped wage credit allowed back-of-house staff to be paid fairly while insuring servers were compensated well.
“The system is working the way it is, please leave it alone,” she said. “We don’t need to be saved.”
Sen. Patricia Ritchie, R-Heuvelton, was invited to attend the hearing but could not, due to legislative sessions in Albany. She sent a representative who read a letter in support of keeping the tipped wage as it is.
“It is my hope that the Governor and Commissioner will truly listen to those most directly impacted,” she wrote.
Many of the speakers were local, but others had come from elsewhere in the state, like Beth Alexander, owner of Hattie’s, a nationally known restaurant in Saratoga Springs.
“Servers already make $25 to $50 an hour,” Alexander told the Times in an interview before the hearing.
By her calculations, increasing from the tipped wage to the minimum wage would raise prices by 40 percent. As for the argument that a reliance on tips makes it harder for servers to confront sexual harassment, she did not think that minimum wage would solve the problem.
“How is that changing the behavior?” she asked.
Two representatives of the Retail, Wholesale and Department Store Union came to speak particularly about the experience of car wash workers and advocating for these workers to be paid a minimum wage.
“Workers feel time and time again they are not being fairly compensated for their hard work,” said David Jimenez, a representative of the union.
Jimenez described the work of car wash workers as being difficult, poorly tipped, and often requiring work with toxic chemicals with little safety equipment and training.
“Hopefully we can have one fair wage,” Jimenez said.
Kevin Dugan, director of government affairs for the New York State Restaurant Association, asked the commissioners why the issue was even being brought up, as he said the state legislature had reached an agreement in 2016 to leave the tipped wage at two thirds of the minimum wage.
“Over 95 percent of servers during their shifts make over minimum wage,” Dugan told the Times.
Asked about concerns about other industries, like car wash workers, Dugan said they could be dealt with separately while leaving servers at the current rate of pay. Addressing the concern that the tipped wage system allows some employers to abuse their workers — for example, by stealing tips — Dugan said there are already solutions in place.
“The Department of Labor already has laws in place that protect people who work for these bad apples,” he said. “I don’t think getting rid of the tip credit is going to make things better for anyone in the industry.”
Video from the hearing can be seen at http://wdt.me/tipped-wage.