Eliminating the Tip Credit

Will Harm Small Business

In January of 2018, Governor Cuomo announced that a series of hearings would be held regarding the potential elimination of the Tip Credit in New York. After speaking with various restaurant owners and wait staff in the Greenwich Village/Chelsea area, the repercussions of eliminating the tip credit became clear. New York City is one of the most challenging environments in the country for restaurants due to high taxes,expensive rent across the city, an increasing minimum wage, and new competition around every corner. The elimination of the tip credit would force businesses to cut down wait staff, raise menu prices and could lead to their permanent closing. The tip credit provides businesses a much needed reprieve.  It allows restaurants to pay their tipped workers $8.65 hourly instead of the full $13.00 minimum wage. The $4.35 tip credit allows restaurants to staff more workers and provide them with more hours due to decreased labor costs.