New York State Contemplates Bill Mandating Minimum Wage for Restaurant Staff

A proposed state measure that would boost the minimum wage for servers is raising the fears of restaurant owners in New York City. 

They highlight likely outcomes such as elevated costs for customers and the possibility of staff reductions, potentially resulting in layoffs.

Paul D’Amore, a long time bartender at Gallagher’s Steakhouse in Midtown Manhattan, emphasized the significance of tips in his earnings, constituting around 75% to 80% of his income. 

Currently, while the minimum wage in New York City stands at $16 per hour, the sub-minimum wage for tipped workers, including bartenders and waiters, is less than $11 per hour, with the expectation that tips make up the difference.

However, Assembly member Jessica Gonzalez-Rojas argues that this system disproportionately affects women of color, who tend to receive lower tips than white men, leading to inequities in compensation. 

The proposed bill seeks to mandate that restaurants pay their servers minimum wage, aiming to ensure a livable income for workers. Even with plans to keep tipping in place, some stakeholders continue to have reservations. 

Assessing New York’s Financial Strain

The executive director of the New York Hospitality Alliance, Andrew Rigie, draws attention to prospective cost hikes, calculating that hiring one full-time tipped employee would cost an extra $12,000 annually. 

A survey conducted by the Hospitality Alliance reveals that if the bill passes, 76% of restaurant owners would consider raising menu prices, while 42% would contemplate eliminating tipping altogether to mitigate expenses.

The implications of such changes are significant, with Rigie warning of potential closures, reduced staff, and economic challenges for the industry. 

For individuals like D’Amore, who relies heavily on tips, the proposed shift could prompt a return to his previous career in real estate, where commission-based earnings were the norm. If enacted, the bill includes a five-year phase-in period to allow restaurants and customers time to adapt to the new regulations. 

However, the debate surrounding the legislation underscores the complexities of balancing fair wages for workers with the economic realities faced by businesses and consumers alike.