Last month, 16 Hollywood actresses — including Sarah Jessica Parker, Jane Fonda and Natalie Portman — penned a letter to Gov. Andrew Cuomo urging him to support a higher minimum wage for workers who rely on tips in New York.
“Women deserve to earn a fair base wage so that the tips they still collect don’t come at a personal cost,” the actresses wrote.
The plea fell on compassionate ears, as Gov. Cuomo will hold public hearings through the end of June to address the possibility of ending minimum wage tip credits in New York.
In New York, the tip credit ensures tipped workers make the full minimum wage. Tipped workers, by law, earn a $7.50 hourly minimum wage, plus tips. If they don’t earn enough money in tips to equal the state’s $9 minimum wage, employers must pay the difference. What the stars may not have realized is that most servers oppose a policy change, according to the Restaurant Workers of America.
Responding to the actresses’ letter, and in an attempt to save the tip credit, hundreds of mostly female restaurant workers signed their own letter. “We’re servers and bartenders by choice, just like you chose to be actresses. The industry gives us flexibility, and the current tipping system gives us opportunity to earn great money with less than full-time hours,” the letter read.
Tipped workers and restaurant owners alike argue that if the tip credit were eliminated, dire consequences would result, including fewer jobs and lower pay.
“I feel like the celebrities didn’t do it with mal-intention,” said Maggie Raczynski, a mother of three who works as a bartender at Outback Steakhouse in Clifton Park, New York. “But because they don’t really know how it works and what’s really going on, they were uninformed of the actual consequences of eliminating the tip credit.
“The tip credit is an economic tool. It was put in place to give restaurant owners a bit of a break when it came to labor costs, which helps them turn a profit,” said Kevin Dugan, government affairs director for the New York State Restaurant Association. “Tipped workers barely notice the tip credit, because almost universally they’re the highest paid employees at any restaurant.
“Getting rid of the tip credit could be crippling to the restaurant industry,” said Dugan, who warns that getting rid of the tip credit would result in shuddered businesses and less income for workers.
The actresses also pegged their letter to the #TimesUp hashtag and wrote that relying on tips forces many workers to endure widespread sexual harassment.
They wrote, “Relying on tips creates a more permissive work environment where customers feel entitled to abuse women in exchange for ‘service.'” Some 70 percent of workers who receive tips in addition to their hourly pay in the United States are women, according to Reuters.
But again, workers disagree. “If that were the case, hundreds of thousands of people wouldn’t work in this industry,” said Raczynski. “I’m not saying the stories that have come out are invalid, I’m just saying they’re probably the extremes.”
“To put it frankly, if the restaurant owners and the workers in the restaurants are on the same side, why do we have to fight so hard?” said Raczynski.
The Tip Credit: By the Numbers
Tipped Minimum Wage: $7.50
NY State Minimum Wage: $9.00
Tip Credit: $2.50 (paid by employers if workers don’t earn enough tips)
NY Mean Hourly Wage, Bartender: $15.15
NY Mean Hourly Wage, Waiter/Waitress: $15.06
