Under a proposal recommended by the state’s Wage Board on Friday, January 30, 2015, tipped workers in New York state, including restaurant servers and hospitality workers, would have their minimum hourly wage increased to $7.50 per hour before tips.

If approved by the commissioner of the New York Department of Labor, the proposal would go into effect on December 31, 2015.  Governor Andrew Cuomo has already indicated his support for the proposal.  “For far too long, wages for tipped workers in New York State have been too low,” Cuomo said in a statement.  “Today the Wage Board has recommended a course that begins to rectify that.”

Under state law, the owners of restaurants, hotels and other hospitality businesses are allowed to pay their tipped workers less than the minimum hourly wage, so long as gratuities make up the difference.  While the New York state minimum wage is currently set at $8.75 per hour, and will increase to $9 by the end of this year, the hourly minimum wage for tipped employees is $5.

The recommendation to increase tipped workers’ wages was one of a number of proposals (available here) voted on by the state’s Wage Board, a three-member panel convened by the Cuomo administration in 2014 to review regulations impacting New York’s service employees and food service workers.  In addition, the Wage Board approved a provision to increase the minimum wage for tipped workers in New York City to $8.50 per hour if the city is allowed to set a minimum wage that is higher than the state’s, and a provision to increase the “tip allowance” for tipped workers by $1.00 per hour when the weekly average of cash, wages, and tips exceeds the applicable hourly minimum wage by a defined amount (150% in New York City or 120% in the rest of the state).  The latter proposal would ease the burden of the new recommendations on employers by essentially allowing businesses to pay tipped workers a dollar per hour less if they are making substantially more than the minimum wage once tips are included.

The State Labor Department announced that its acting commissioner, Mario J. Musolino, will seek to implement the Wage Board’s final report of recommendations “as quickly as possible.”  In the meantime, we will continue to monitor the status of the Wage Board’s recommendations and will keep you apprised of any developments.