Food Service Workers Suffer Under Toxic Tipping Industry

Cartoon by Emma Hines.

When the “Fight for 15” campaign began in 2012, the minimum wage in New York State (NYS) was $7.25 and $15 seemed like a pipe dream. Now, it is slowly becoming a reality for New Yorkers. While the current implementation of upping the minimum wage is a positive step forward in the state, the interests of tipped food services workers, such as waiters and waitresses, are still largely unaddressed.

The state defines a “food service worker” as an employee who is “primarily engaged in the serving of food and beverages to guests, patrons or customers in the hospitality industry.” This demographic makes up dozens of students making ends meet and countless dedicated members of the workforce who rely on their income to pay rent, put food on the table and even support their families.

NYS Governor Andrew Cuomo’s 2016-17 State Budget increased the minimum wage to $15 per hour; the measure is projected to significantly raise the earnings of some 2.1 million in-state workers. On Dec. 31, 2016, the first set of wage increases were put into place, and further raises were calculated based on the region and industry. Each area’s annual increases are calculated to give businesses in the area time to grow with the new regulations.

We at The New Paltz Oracle commend Governor Cuomo’s economic initiative to better quality of life for minimum wage workers. However, we condemn the unequal treatment towards tipped food service workers who are members of our campus and community.

While general minimum wage workers can rest easy under the assumption that a fair raise is set for their future, the same cannot be said for tipped food service workers. The cap for these workers sits significantly lower than other workers, capping off at $10 per hour. The $7.50 minimum was maintained until December of 2017. 

The wage rate schedule is broken into four distinct categories pertaining to the location and business type: New York City (NYC) Large Employers (11 or more employees), NYC Small Employers (10 employees or less), Long Island & Westchester and the “Remainder of NYS Workers.” The latter category is where the Ulster County workers reside. 

According to this schedule, NYC workers were the first to reap the benefits, fully securing the $15 minimum wage by 2018. Long Island and Westchester wages are still shy of the mark, currently resting at $12 an hour, but will reach the benchmark by 2021. In last place rests Ulster County and its unnamed constituents who operate on a $11.10 minimum wage, with only a $1.40 increase projected for 2020. It is likely that Ulster’s seemingly sluggish ascent to the state minimum wage is due to the lower cost of living and the lesser economic prosperity of our county. 

Since 2016, Ulster tipped food service workers watched idly as their cash wages from employers remained stagnant at $7.50 through 2018-’19. Projections for the 2020 -’21 cycle only call for a raise to $8.35, with no current estimate of progress at that point. As the rest of the state watches their paychecks grow consistently, tipped food service workers merely collect nickels and dimes. 

Restaurants currently employ a “tip credit” in which allows owners to lump employees’ tips and hourly wages in order to equal the minimum wage. As long as employees are notified beforehand, tax credits are permissible. State regulations mandate the minimum amount of tips workers must receive for the tip credit to be applied, and imposes a cap on the credit that can be collected from tips. 

According to the NYS Department of Labor (DOL), tipped workers’ minimum wage rests at $11.10 per hour. This minimum is calculated by combining the $7.50 minimum with the $3.60 tip credit to make up the difference. However, this rests on the assumption that merit-based tips will subsidize the gap in pay imposed by the tip credit. 

The blame of the food service workers’ undercompensation does not rest on the shoulders of small-business owners alone. Running a restaurant is one of the hardest jobs, as it involves long hours, constant oversight and sometimes operating on razor-thin margins, making tip credit essential to their survival. As a result, many businesses resort to paying workers “off the books,” which is both illegal and can lead to a slew of additional ethical issues. 

We at The Oracle believe that restaurants’ reliance on merit-based tipping to subsidize paychecks is outdated, problematic and detrimental to the financial well-being of tipped food service workers and the owners. 

According to an article written by Time magazine, the system of tipping as we know it stems from racist practices by business owners following the freedom of slaves. Freed slaves who worked in the service industry were offered no pay and instead had guests offer small tips. As time passed, the practice became normalized as restaurant owners realized they could subsidize employee’s wages with customers’ extra cash. Why do we perpetuate a system founded on discrimination and oppression? 

Many working students must sacrifice their academic and social life in order to pay bills, student debt and a whole litany of expenses that affect their daily lives. The money they rightfully earn from diligent work and stellar customer service should not be an additional sacrifice they must endure. 

The responsibilities of restaurant workers go far beyond wearing a sweet smile and carrying plates. Making a restaurant work requires clockwork-esque cooperation, plus a great deal of focus and energy. To keep the operation running clean, employees must go above and beyond, including piecing orders together in the kitchen, restocking server stations and staying late to clean and polish the furniture. And despite all of the precautions and courtesies undertaken to strive for perfection, employees still have to endure harsh criticism and rudeness from customers, from whom their income is primarily based.   

We believe that the best way to address the underpayment of tipped food service workers is to implement a statewide “equal treatment” law that would impose a universal minimum wage for all workers in the state.

The methods used by restaurants to distribute tips are far too diverse and often unfair to ensure equal treatment of employees. Sometimes they are distributed in a hierarchical manner (from managers, down) or staff who are afforded decent minimum pay are able to dip their fingers into tips they did not earn. It additionally creates an adversarial relationship between restaurant workers and their servers. This practice of tipping needs to be eradicated altogether and replaced with a sustainable form of income for staff.  

According to the Economic Policy Institute—a non-for-profit, non-partisan research institute founded in 1986— poverty among waitstaff is significantly lower in areas where workers must be paid the base minimum wage. In the same vein of thought, servers who are afforded the same wages have a higher quality of living.

With all this in mind, we strongly urge readers to tip their servers. Until the county, state or country takes steps to alter the era of tipped food service workers, they must rely heavily on human compassion and respect to make ends meet.