Completing its task assigned by former Commissioner of Labor Peter Rivera, the current New York Wage Board has issued its recommended findings to the Commissioner with respect to tip credit issues. Most importantly for hospitality employers – an industry sector which includes many small, low-margin businesses – if approved by the Commissioner, the available tip credit will be reduced at the end of this year so that the cash wage payable to industry tipped employees rises to $7.50/hour (a tip credit of $1.50 off of the minimum wage of $9.00 as of the end of this year, absent further legislation). This is a 60% decrease in the available tip credit. In an effort to compromise, the Wage Board has recommended the tip credit regulations provide for a $1 increase to the credit (i.e., a $6.50 per hour cash wage) if total compensation (wages and tips) reaches certain levels. The precise mechanics of this proposed scheme are unclear and shall require clear regulatory guidance from the Department.
Acting Commissioner Mario J. Musolino remains free to modify or reject these proposals. Industry employers, as they should now be accustomed to doing, must monitor the results of this Wage Board process.