Cuomo ends subminimum wage for tipped employees

Elise Czajkowski
January 02, 2020 - 2:13 pm

Sipa USA


NEW YORK (1010 WINS) -- Gov. Andrew Cuomo has ordered the State Department of Labor to eliminate the subminimum wage for tipped workers in some industries.

The order will impact more than 70,000 tipped employees in roles such as aestheticians, hairdressers, valet parking attendants, tow truck drivers and tour guides.

"In New York, we believe in a fair day's pay for a fair day's work," Cuomo said in a statement. "Today, I am directing the labor department to put an end to the tip credit in the industries with the highest risk of wage theft to help restore fairness for workers, many of whom are critical to the service industries that keep our economy moving forward."

The new regulation will be phased in over the next year. By the end of 2020, all of these workers will make the state minimum wage.

Only workers in industries labeled as "miscellaneous" by the state will be affected by the change. Notably, restaurant workers will not be impacted.

The current tipping system allows business owners to pay workers less than minimum wage if, with tips, they are paid at least minimum wage.

A report from the Department of Labor found that this system had a disproportional impact on women, minorities and immigrants.

The report also found that there was significant confusion about the rules, which allowed for wage theft in certain industries.

A 2008 investigation found that half of car washes in the state, and nearly 80% of car washes in New York City, violated wage laws, sometimes paying only $3 per hour.