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State holding public hearings to discuss tip credit

Employees who work in restaurants or otherwise earn their wages in tips may be interested to learn that on April 16, it was reported that the state labor commissioner began a series of public hearings about the topic. The first public hearing took place on April 20 and allowed advocacy groups and others to discuss tips.

The public hearings were scheduled after New York Governor Andrew Cuomo stated that tips were not meant to be used as a subsidy to ensure that employees were paid at least the minimum wage. Instead, the tips should be used as a reward for good service. In New York City, tipped workers must be paid a minimum of $13 an hour although $4.35 of a worker's tips can be used toward that amount. The minimum wage for other parts of the state is lower, but a certain amount of the tips earned can still be used toward the minimum wage.

Some advocacy groups for maintaining the state's tip credit argued that a change could be harmful to the industry. The governor, on the other hand, noted that removing the tip credit could reduce discrimination as black workers are often tipped less than their white coworkers. Further studies have shown that workers in states that require the minimum wage to be paid experience less sexual harassment than tip credit states.

Even though tipped workers are entitled to minimum wage, some employers may still attempt to pay them less than what they are owed. An attorney may file a wage and hour claim in order to hold the employer accountable by determining how much the employee is owed under law. If the employer refuses to compensate the owed wages, the attorney may file a claim in court in order to seek compensation for back pay and other benefits.

Source: Nation's Restaurant News, "New York to begin tip-credit public hearings", Ron Ruggless, 04/16/2018

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