NYC Hospitality Alliance Tip Credit Rally Recap

tip credit rally NYC hopsitality allianceThe NYC Hospitality Alliance was proud to stand alongside a diverse coalition of 250 restaurateurs, tipped workers and advocates at our rally calling on Gov. Cuomo and the Department of Labor to save the tip credit!

When called upon to have your voices heard, NYC Hospitality Alliance members came out en masse and sent a clear, strong and respectful message that eliminating the tip credit will be disastrous for our city’s restaurants and bars. We could not have been prouder of this grassroots effort rally and seeing you all engaged in the political process. Tipped restaurant and bar workers from all walks of life also made powerful arguments about why New York State must keep tip credit intact, in its current form. In addition to everyone who testified we submitted nearly 1000 “Save the Tip Credit” cards signed by operators and workers from all over the five boroughs.

Here is a transcript of the NYC Hospitality Alliance’s testimony:

My name is Andrew Rigie and I am the Executive Director of the New York City Hospitality Alliance, a not-for-profit organization representing thousands of restaurants and bars. For the record, I would like to submit these more than 700 pieces of testimony from restaurant operators and workers who are busy at work and unable to be here today. Additionally, it should be noted, the many more who attended our rally earlier, and others will miss their chance to testify because they need to get back to run their restaurants. But let it be clear, all of these New Yorkers, collectively call on Governor Cuomo and the Department of Labor to preserve the tip credit in its current form.

You have heard powerful stories on both sides of this issue. But I must correct some of the misleading and incorrect arguments that have and will be made in favor of eliminating the tip credit.

1. Fair and equitable regulation is fine. Excessive and unrelenting regulation is not. We supported the $15 minimum wage, anti-harassment training and strong worker protections.  But between market pressures and the most competitive restaurant scene in the world, our industry needs to breath. We need relief, not more regulations.  By the end of 2018, recent labor mandates for restaurants in NYC include doubling the tip wage in a mere three years.  Eliminating the tip credit would triple it.  Six consecutive, annual minimum wage increases.  A $300 increase to the minimum weekly rate for salaried employees, paid sick leave and healthcare costs.  Plus, the upward pressure these increases placed on wages as a whole.  Eliminating the tip credit would cost an additional $14,000 per full time, tipped employee, per year. Please have empathy and imagine if your personnel expenses increased 200% within a few years.

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2. Raising the tip wage will not reduce wage theft. We stand in solidarity with all workers who testify about horrible work conditions they’ve endured. We do not believe, however, that an employer who breaks the law now, will magically comply with the law if you make them pay more. If you eliminate the tip credit the damages will be bigger and honest employers and workers will be hurt.

3. If sexual harassment is tied to tipping, this proposal does nothing to change that: If advocates believe there is a correlation between tipping and sexual harassment then why do they say they want to preserve the tipping system, rather than abolish it?  Even if New York eliminated the tip credit, by their own admission, employees would still rely on tips for income, therefore, according to their logic, workers will still be trapped in an economic system that perpetuates harassment.  Sexual harassment and exploitation is unconscionable and illegal and that’s why our state and city passed mandated anti-sexual harassment training we support.

4. Comparing NYC to California is purposefully misleading: West Coast restaurants are not all thriving, and many are furious by the fake news campaign suggesting they are. In fact, there is a campaign to get a tip credit. Earlier this month, The New York Times ran a story about San Francisco  showing that service staff there is being eliminated due to labor costs, which includes no tip credit. Even considering this, in California, commercial rents are much cheaper than NYC. Food costs are much less.  Comparing NYC to California is comparing apples and oranges.

5. The data already shows that the industry is hurting here in NYC: Since the tipped wage increased in 2015 the full-service restaurant industry in NYC is changing and hurting. Annual employment growth averaged almost 7%. It then dropped to less than two percent. During a similar period, there was 23% growth in full liquor and beer & wine licenses.  After the 50% increase in the tip wage, it plummeted to less than two percent.

6. Tipped employees here in NYC are doing quite well, thank you. Our survey covering more than 14,000 tipped workers, found their median wage to be $25 an hour. According to The Justice Will Be Served Campaign represents low-wage workers, most of whom make less, still do not want the tip credit eliminated either.

You’ve heard the stories from struggling restaurant owners. You’ve heard from workers who have had their hours and overtime cut back or lost their job. New Yorkers are saying, “You’ve got to be rich to eat at a normal restaurant in NYC these days.” We are confident that Governor Cuomo and the Department of Labor’s commitment to worker rights and economic opportunity are not at odds. We can increase enforcement of wage theft and harassment laws, while keeping the current tip credit intact.

Andrew Rigie
Andrew Rigie is the Executive Director of the New York City Hospitality Alliance, a trade association formed in 2012 to foster the growth and vitality of the industry that has made New York City the Hospitality Capital of the World. Learn more at thenycalliance.org/