Chinese Workers Oppose Eliminating Tip Credit

Protesting the elimination of the “tip credit.” (Photo via Sing Tao Daily)

About 60 restaurant and nail salon workers gathered in Chinatown on Jan. 29 to protest against Gov. Andrew Cuomo’s plan of eliminating the tip credit in their wages. The plan, proposed by the governor early last year, aims to raise the minimum wage of tipped workers to the regular $15 per hour so that they don’t have to rely on tips to make up their currently lower minimum wage. But many Chinese tipped workers oppose the plan. Organized by advocacy groups the Justice Will be Served! Campaign and the NYC Hospitality Alliance, the workers shared their thoughts at the Chinatown rally.

“This is a lose-lose plan,” said Jianming Lan, an owner of the Jing Fong restaurant. “Once the tip credit is eliminated, restaurant owners will see their costs shoot up, and the workers’ drive to work hard will diminish.” Lan said Jing Fong, founded in 1978, has 200 employees including 60 tipped workers. In the past three years, the minimum wage has been increasing continually.

“I have to pay $1 million more in wages to all my employees now,” said Lan. “I had to cut their work hours from 40 per week to 38 per week, and raise the prices of dishes 5 percent annually to balance the costs. If the vicious cycle keeps going, I really worry that we’ll lose customers.” Lan believes an official elimination of the tip credit would prompt customers to reduce their tips, and the workers would suffer a double whammy.

Jinming Cao, a restaurant worker and member of the Justice Will be Served! Campaign, said when he worked for a restaurant in midtown Manhattan 10 years ago, his salary was only $300 to $500 per month. But he made more than $2,000 per month including tips. And now, tips are still the major part of the income of servers who, although on lower minimum wage, can make $20 to $25 per hour including tips. If the tip credit is eliminated, the minimum wage of these workers would be raised to $15 per hour, which is still less than they currently make.

Supporters of the governor’s plan claimed that many waitresses who rely on tips have to tolerate sexual harassment from customers or their bosses. But Andrew Rigie, executive director of the NYC Hospitality Alliance, argued: “If that’s true, why not prohibit tipping completely?” He also pointed out that eliminating the tip credit won’t help curb wage theft. Rather, some employers may further cut workers’ hours or lay off more people, so workers would make less.

“I have been working as a waitress for about 10 years. The increase in minimum wage over the years has never brought me any benefit,” said Xiuyun Kuo. “Yes, the employer will have to pay you what the law requires. But I get less hours, a heavier workload, and fewer tips. We all know that in Chinatown, many service workers are not able to get the minimum wage because the government hasn’t done a good job in enforcing the law. This is not only unfair to the law-abiding employers, but also encourages wage theft. Rather than eliminating the tip credit, I hope the government can tighten up its enforcement on the labor laws.”

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