Should New York eliminate the tip credit? Hundreds attend heated public hearing to speak out on both sides

A heated, over-capacity public hearing to review New York state’s tip credit was held Friday at Farmingdale State University.

It was the first — and only one on Long Island— of seven public hearings scheduled throughout the state to examine whether businesses who have tipped workers, such as restaurants, car washes, hotels and nail salons, should continue with the current practice of making up the minimum wage with tips or establish a single, universal minimum wage for all workers, independent if they earn tips or not.

“There are certain tipped workers like car wash and nail salon workers, where tips are sometimes very low or non-existent, because customers don’t realize those workers rely on tips, which makes it very financially insecure,” Restaurant Opportunities Center United’s New York executive director Catherine Barnett said.

Currently Long Island’s minimum wage, as established by the state, is $11 per hour, of which $3.50 can be a tip credit, meaning tipped workers earn $7.50 and the rest has to be either made in tips or compensated by their employers. This creates a two-tiered system in businesses with tipped workers, where for example, back-of-the-house workers at certain restaurants can sometimes make twice as much as front-of-the-house workers if there aren’t enough tips made on a particular day.

Supporters of the campaign say that they’re fighting to eliminate the two-tiered system so everyone “experiences financial security and is not discriminated or sexually harassed against because of being forced to live off tips,” Barnett said.

“This is not about eliminating tips, on the contrary, customers can tip the workers as much as they like, this is about guaranteeing a fair wage regardless of tips and eliminating all the issues that now exist because of the tip credit. ”

Opponents say that by eliminating the tip credit in New York, the restaurant industry will be “upended and redesigned” because it will force some restaurants not to raise wages for back-of-the-house workers, said vice-president and co-founder of Restaurant Workers of America Joshua Chaisson.

“The way the law is written in the state of New York, it requires face-to-face interaction with guests. That’s why they receive tips, unlike back-of-the-house workers who prefer not to have that interaction,” Chaisson said.

“Ultimately people who will pay the price are back-of-the-house workers. We would much prefer that ownership divert the funds to back-of-the-house workers who oftentimes make above minimum wage. If not, how long will a line cook have to wait for a raise?” he said.

According to Census data, Long Island restaurant workers make a median wage of $11.65 per hour compared to tipped restaurant workers who make a median wage of $10.49 (including tips.)

New York State labor commissioner Roberta Reardon and other officials listened to the testimony of over 150 people from different groups and coalitions such as Restaurant Opportunities Center United, SEPA Mujer, Nail Workers Association, Make the Road-NY, Restaurant Workers of America, Applebee’s workers and others, who supported or opposed the ‘One Fair Wage’ campaign.

The crowd, which reached over 500 people — at one point the fire marshal had to threaten to close down the hearing if people didn’t evacuate the hallways and exits — was divided into two very clear groups with supporters and opponents separated by a corridor. They cheered, booed, applauded and even shouted at each other as the testimonies progressed. Reardon had to call the room to order several times, especially when opponents started complaining about people who testified in Spanish with translators. Reardon admonished them saying that “if anyone is disrespectful, others will be disrespectful to you.”

“People are very passionate about this issue. You’re talking about livelihoods and restaurants’ livelihoods. We expected this,” labor department communications director Peter Brancato said. “We have six others [hearings] to go to and we anticipate talking to hundreds of people before we are done with the process.”

The issues of race, ethnicity and gender

In addition to the minimum wage disparity, the majority of testimonies also touched on issues relating to gender, race and ethnicity, something that local non-profit organizations that advocate for women and immigrant’s rights such as SEPA Mujer, have taken note of.

“There are too many of our members who are negatively impacted by the two-tier system,” testified SEPA Mujer community organizer Dulce Rojas.

More than 60 percent of tipped restaurant, hotel maids and nail salon workers are women (the overwhelming majority of testimonies yesterday were also women,) and as per the Census data analysis, 43 percent of tipped restaurant workers are single mothers and 30 percent are Latino.

“For many women, working at a deli or a restaurant is their first job, or the job they will keep through their 30s and 40s,” Barnett said.

Rojas said that many women who worked in these industries as tipped workers experience not only wage and tip theft, as per data collected by the different organizations in the campaign, but are also sexually harassed and discriminated against on a regular basis.

“Although the restaurant industry alone counts for 7 percent of working women, it has nearly 15 percent of sexual harassment claims,” she said. “Many women are afraid to speak out against injustices because they need their jobs and for fear of retaliation from their employers.”

Chaisson said that he found the claims of sexual harassment “disingenuous.”

Riverhead Applebee’s waitress Migle Micrulevaciute, who opposes the ‘one fair wage’ campaign, said that she makes around $100 per day in tips and has never experienced any sexual harassment or discrimination.

“If you are truly harassed and discriminated against pick another job and just leave your job. Nobody is chaining you down to this job. Speak on your behalf on your own restaurant or report it to the Department of Labor or something. They are not making you stay,” she said.

Riverhead resident Gilma Garcia, who worked eight years at a restaurant in Westhampton helping in the kitchen, said she witnessed firsthand how the manager encouraged waitresses to wear more revealing clothes to attract the attention of men so they tipped more, but if they touched them inappropriately, they would not speak for fear of being fired.

“I am a single mother. When the weather was bad we couldn’t work, and the payment I received was not enough to provide food, pay bills and other necessities,” she said. “Waitresses had to wear short clothes to get better tips, and even then sometimes there were good tips and sometimes not and it was very unstable to live like that.”

“I ended up quitting because I don’t want to depend on tips for a good quality of life and I don’t want to be forced to do anything else outside of the rules of work that I don’t want,” she said.

Currently, seven states currently bar tip credits: Alaska, California, Minnesota, Montana, Nevada, Oregon and Washington.

Broncato said the last hearing is scheduled for June 27 in New York City, and after a thorough review of all testimonies which can last months, a determination will be made.