State orders minimum wage increase for tipped workers

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ALBANY—The state Labor Department has ordered an increase in the minimum wage for tipped workers across the hospitality sector by the end of the year.

In an order released Tuesday, acting labor commissioner Mario Musolino accepted four out of five recommendations of a wage board created last year by Governor Andrew Cuomo. Those include consolidating tipped workers in restaurants and hotels into a single class, and increasing their minimum hourly wage to $7.50.

“After receiving testimony divided between those in favor of eliminating the tip credit and those opposed to any change, I believe this recommendation strikes the proper balance,” Musolino wrote. “It increases wages for those who have been without a raise for far too long and completes the goal that was postponed in 2009 of establishing a single rate for all tipped workers.”

The state's minimum wage is scheduled to rise to $9 at the end of the year, per a 2013 legislative agreement. Currently, various classes of tipped workers are paid $4.90, $5 and $5.65 per hour.

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Musolino's order—which is still subject to comment and review before its provisions take effect—also recommends that the tipped rate for workers in New York City automatically rise by one dollar if the state adopts a bifurcated minimum wage. Cuomo, in his budget proposal, proposed increasing the minimum wage to $11.50 for workers in the five boroughs, and to $10.50 elsewhere in the state.

Musolino's order was praised by unions and worker advocates, but met with skepticism from business groups. The National Employment Law Project called it a “significant step forward” and said it was heartened by Musolino's order of a study on eliminating the tipped wage altogether.

Melissa Fleischut, president of the New York State Restaurant Association, said it was “troubling” that the increase will not be phased in over time.

“By rubberstamping an extreme, unprecedented 50 percent increase it becomes hard to believe New York is really ‘Open for Business,'” she said, referring to a Cuomo talking point.

The governor himself is expected to tout the increase at a morning rally at the headquarters of the Hotel Trades Council.

Here is Musolino's order: http://bit.ly/1GoRXAD