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Restaurant Workers, Owners Rally Against Cuomo's Proposed End To Tipping

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Senator Fred Akshar joined dozens of restaurant workers and owners Thursday to rally against a policy Governor Cuomo’s is putting forth that would eliminate tip credit in New York.

This policy would take away tipped wage for workers in the restaurant and service industry.

During the rally, Akshar called the proposed policy a “job killing regulation.”

“As a bartender, I willingly accept this lower wage knowing that my wages will be made up in tips. When the owner of the bar is forced to increase minimum-wage to pay everyone the standard minimum wage it would increase his payroll cost, which would then drive up prices, which will then affect my customers, leading to a potentially negative experience or less available money for them to come out to enjoy our local restaurants and bars,” said Michelle Brown, bartender at Nip’s Park Avenue Saloon.

The current tip credit currently allows restaurants to pay tipped employees less than the federal minimum wage and use tips to make up the difference. This saves restaurants on labor costs and gives them flexibility in how they pay their workers. It also offers a way to hold workers accountable for the service they provide customers.

However, Cuomo’s new rule wants to end the current tip credit due to allegations that many of these workers are taken advantage of and not properly compensated. However, opponents say the new policy would not help, but hurt employee compensation.

“When you increase costs, you gotta pay for it somehow, so how are you going to pay for this? It's either going to be on the backs of the employee or it’s going to be on the backs of the people that eat the food and enjoy the service and love to put money back in the economy,” said Jennifer Conway, President of Greater Binghamton Chamber of Commerce.

Many opponents are saying this new rule is just a shrouded way for the government to raise taxes.

“This system has worked for years and years and years, and for some reason, I’m sure someone crunched numbers and found out that if they raise the minimum wage and do away with tipping, the bills would be bigger, so there will be more sales tax on the bills,” said Ed Hickey, Owner/Manager of Belmar.

“It’ll cause business owners to raise prices, which I think is the goal here. The higher the prices, the higher the sales tax, the higher the sales tax, the more money our government can waste. This isn’t about trying to level the playing field for the servers or tipped employees, this is about using them as a pawn in a system that’s broken,” said Hickey.

In 2016, the State of Maine passed a regulation that ended the tip credit. However, in less than a year, the decision was reversed after public outcry from restaurant employees.
“The Southern Tier economy is not growing. Jobs are not being created, and it’s happening because the vast majority of people in Albany are not listening to the needs of the folks here. So when you talk about a ‘job killing regulation’ such as this, that will do just that. It’s going to kill jobs. It’s going to force business owners to close their doors,” said Senator Akshar.