Restaurant workers are paid in a number of different ways. Usually, employees that do not have the opportunity to make tips, such as managers, hostesses and kitchen staff, are paid a salary or an hourly wage that is at or above the required state and Federal minimum wage. Those that do have the ability to make tips, such as servers, bartenders and sometimes bus boys, are paid at an hourly rate that is below minimum wage. The thought is that by collecting tips the workers will make at least the minimum wage if not surpassing it. If the employee does not make at least as much as they would if being paid minimum wage, the employer is required to make up the difference.
Now, New York State service workers might be getting a raise. Service workers include restaurant workers that make tips. Various groups, including labor unions and service worker organizations, are pushing for these parties to be paid at least minimum wage, even if they are tipped. They have submitted their pleas to state officials and it is now up to the state wage board to make a recommendation. Once the board makes a recommendation, the New York State Labor Commissioner is responsible for making a final decision, which is expected in February of 2015.
Over the next couple of years the New York State minimum wage will be increasing and will be at a rate of $9 an hour by the last months of 2015. There have been many local and nationwide efforts to raise state and Federal minimum wages over recent years but localities such as New York City have resisted.
What does this all mean for restaurant owners? Higher costs! The requirement that service workers be paid more coupled with the increase in state minimum wage could mean that many restaurants will have to operate with fewer employees who are working fewer hours. This will surely add to the struggle of owning a restaurant, especially in the extremely expensive New York City area.
The New York City based DiPasquale Law Group represents restaurant owner clients with employee wage and tip issues. Call us at (646) 383-4607 for a consultation today.