Debating a ‘Fair Wage’ vs. Tipped Wage

Congresswoman Nydia Velazquez speaking out in support of One Fair Wage Act. (Photo by Kelly Mena via Kings County Politics)

U.S. Rep. Nydia Velazquez (D-Brooklyn, LES, Queens) and a number of state legislators representing Brooklyn paid a visit this week to Marlow & Sons restaurant to serve coffee and shadow food service workers. Their objective, writes Kelly Mena in Kings County Politics, was to experience what it’s like to work in the service industry, and to shed light on the federal Raise the Wage Act. But in making their case for the end to the tipped wage in favor of a minimum service wage, the politicians managed to draw criticism from the very workers they are aiming to protect, Mena reports.

As part of the initiative, led by the national organization Restaurant Opportunities Centers United (ROC United) supporters are pushing for New York State passage of The Raise the Wage Act — requiring employers to pay all workers, including tipped workers, a full minimum wage of $15 an hour plus tips.

The rub is two-parted according to critics and many servers in A) they believe the measure will put an increase on menu prices, which will drive down tips, and B) the total tips would then be divided evenly between all front and back service industry workers, including tips from servers slinging drinks on a hectic Saturday night, for example, with servers that prefer working on slow Tuesdays.

Currently, the state’s minimum wage rate is $11.10 an hour and New York City’s minimum wage is $15 an hour. Though due to labor laws tipped employees are allowed to be paid less an hour due to the tip credits which bump up their earnings. However, if servers do not make the difference up and then some in tips, the service industry must pay these workers the $15 per hour.

Velazquez argues that the higher minimum wage “levels the playing field, not only for workers in America but also for the good restaurants that want to do the right thing on behalf of their workers.” But workers worry that the well-intentioned move could backfire, and some restaurant owners who have tried to change their business model to help their employees have encountered problems. One such owner is Brooklyn restaurateur Andrew Tarlow, who owns the Marlow Collective of seven eateries, including the Williamsburg-based one which Velazquez and others visited. Writes Mena:

In 2015, Tarlow attempted to go gratuity free across all of his well-known Brooklyn venues. The model was expected to bridge the gap between waiters, who make more because they can collect tips, and cooks, who often earn less because they cannot.

During this time, employees at many of the eateries criticized the model complaining they were paid less and took a slash to the yearly earnings. In some cases, some of the most senior employees jumped ship due to the smaller paycheck. In late 2018, Tarlow was forced to revert back to tipping citing the rising costs of dishes.

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