Department of Labor Keeps Tip Credit Intact for Hospitality Industry
In what can only be described as monumental news for the restaurant industry in New York, Governor Cuomo and the Department of Labor have announced that NO changes will be made to the tip credit for businesses that fall under the Hospitality Wage Order.
This means that for the foreseeable future the tip credit will remain and provide restaurants with a valuable economic tool that will help them make ends meet.
While the Hospitality Wage Order remained unchanged, the Governor did eliminate the tip credit for those businesses that fall under the Miscellaneous and Other Occupations Wage Order. So, nail salon workers, car wash attendants and valet parking attendants, among others, will no longer be subject to a tipped wage and will now be paid the full minimum wage. The elimination of the tip credit for these workers will be phased out over the course of 2020.
For the last two plus years the New York State Restaurant Association has made keeping the tip credit our top priority. When Governor Cuomo instructed the Department of Labor to hold hearings on this issue our Government Affairs team snapped to work and began diligently working on what would become the largest initiative in our Association’s history. We could not have done this without our members and their employees, especially the hundreds of employees that flocked to the hearings to make their voices heard. These road warriors were instrumental in helping get this landmark victory.
Our accomplishment is certainly something that our industry should be proud of, but the fight is not over. More talk about abolishing the tip credit for all industries will pop up again and we cannot take it for granted just because we won in this instance. We will remain vigilant in educating elected officials and the general public on how important the tip credit is and why our employees will be the ones who suffer if it were to be eliminated. But for now, we can rest easy while commending the Cuomo Administration and Department of Labor for listening to what we had to say and taking it seriously. We could not have asked for a better start to 2020 than this.
Governor Cuomo Vetoes Controversial Lien Bill
A controversial piece of legislation that we mentioned several times over the past year was vetoed by Governor Cuomo on Wednesday, allowing the business community to take a big sigh of relief. The Securing Wages Earned Against Theft bill—dubbed the SWEAT bill—passed both houses this summer and would have granted employees the ability to place a lien on their employers' assets while a court case is proceeding. The NYS Restaurant Association joined a coalition with several other business groups to oppose this measure and encouraged the Governor to veto this legislation. We argued that not only does the State already have adequate wage and hour laws, but this bill would have dramatically threatened the financial viability of businesses, especially in their ability to secure, establish, or stabilize creditworthiness. Businesses would not have been able to acquire financial loans and would have severely limited growth in a sector like the restaurant industry which has already been lagging other industries.
This issue will certainly come up again this legislative session with advocates already saying that they will look to reintroduce legislation to accomplish what this set out to do, but again we take solace that Governor Cuomo listened to the business community and refused to sign legislation that would have severely damaged businesses in New York.