Local restaurateurs and servers are planning on attending a rally on Tuesday morning, to send a message to Gov. Andrew Cuomo that they are not in favor of his plan to eliminate the tip credit system. The rally is scheduled to occur prior to the State Department of Labor’s (DOL) fourth public hearing on the governor’s plan.
One local restaurateur who did not want to his name on record had this to say about the proposal to eliminate the tip credit –
“I interviewed a girl on Thursday who was from Alabama. In Alabama servers get $2.13 tip credit wage. She was very happy to hear that in NYS it’s $7.50 tip credit wage. Now remember, if at the end of the week a server has not made minimum wage, the employer is responsible to make up the difference. So there is a safeguard in place for the servers if there is a slow week. But typically they make well beyond minimum wage, which is why most of the servers are against the governor’s plan. This is not about restaurant owners being greedy, it’s about allowing servers to make a decent living, and it’s also about small restaurants trying to stay in business. This is the beginning of the erosion of the mom and pop restaurants as we know them today. I’ve been in the restaurant business here in Buffalo for 25 years. Soon, this will be a land of chain restaurants – if this bill is passed, and then minimum wage in NYS goes up to $15 (currently $10.40) an hour.
“The governor also wants all businesses to have set schedules for their employees, which means that servers will have the same schedules week to week – that’s not how the restaurant business works. Some servers are on call when it gets busy, or they go home when it’s slow. NYS is now dictating how we do business. Next thing, servers will be eliminated by iPads and computer ordering stations, because the chains will want to combat the increased labor costs. The small businesses will go out of business because they can’t afford that type of technology. This is not what the restaurant industry is about – it’s about people as much as it is about business. Customers love the tip system because they can voice their opinion if a server is good or bad. The additional labor costs will drive up the prices of the food and the drinks, to levels where customers are not going to want to pay the prices. See how long a restaurant lasts in those conditions.”
So what’s Cuomo’s beef with the tip credit system? There are those who say that Cuomo is looking to eliminate the tip credit system to drive up tax revenues. If the servers’ wages increase, payroll taxes increase. The result is increased menu prices, which leads to higher bills, thus higher sales tax revenues. If that’s the case, the servers are being used as a scapegoat.
Do you agree with the elimination of the tip credit system? Or do you think it should stay? Let us know what you think in the comments section below.
Local Restaurateurs and Servers to Rally Against Elimination of Tip Credit
Tuesday, May 8, 2018
9 a.m. – The hearing is set to begin at 10 a.m.
SUNY Erie City Campus, 121 Ellicott Street, Buffalo