DOL Commissioner Needs to Amend Wage Board Proposal
Tuesday, February 17, 2015
The following opinion-editorial appeared in the Albany Times-Union on February 17, 2015.
By: Melissa Fleischut, President and CEO of the NYS Restaurant Association
The Wage Board has officially submitted their proposal to raise the cash wage for tipped employees from $5.00 to $7.50, a 50 percent increase, effective December 31, 2015. In doing so they have dramatically overstepped the precedent set by the legislature that gave the board its authority.
The Wage Board was convened in response to the 2013 budget deal that incrementally increased the minimum wage from $7.25 to $9.00, a 24 percent increase, over a three year period. The Wage Board’s increase includes no such phase in, and is a 50 percent jump. That’s over double the amount the legislature deemed appropriate, in a two year shorter time frame!
The Acting Department of Labor Commissioner Mario Musolino will now review the proposal and has the power to amend or reject it. The restaurant industry believes he should amend their proposals to fall in line with the incremental and smaller increases that the legislature approved.
If the Acting Commissioner approves the unprecedented increase many small business owners in New York will be forced to find a way to cope with a 50 percent increase in labor costs for the largest sector of restaurant employees. Raising menu prices will not cover that much of an increase. Hours and jobs will have to be cut, and many of the fast casual chain restaurants will continue to replace servers with tablets. All of these things degrade customer service, the linchpin of the hospitality industry.
What’s worse is that the Wage Board’s recommended increase would not help tipped workers bring home more money. Servers and bartenders work for tips, and they make good money doing it. According the Bureau of Labor Statistics, in 2013 the average New York server made $11 per hour, and the economy has only improved since. What these employees want is steady customer flow and hours working the floor so they can earn good money through tips. Higher base wages mean shorter hours and layoffs, which means wait staff will be bringing home fewer dollars each week.
Raising the cash wage of servers won’t help tipped employees if owners have to cut their hours; it won’t help the cooks and dishwashers who were hoping for a raise and don’t receive tips; and it certainly won’t help the small business owner who is simply trying to make payroll and keep what they created solvent.
New York should strive to increase employment and employee earnings. In the hospitality industry that means not shocking businesses with extreme increases to operating costs so they can stay open and their employees can keep working. We should seek a balance that keeps New York “open for business” while creating a “state of opportunity” for all restaurant employees to work hard and take home good money. A one-shot 50 percent increase is not a balanced approached.
With the Wage Board’s final decision now put forth, we urge Governor Cuomo and the Acting Commissioner of Labor to follow the precedent set by the legislature and amend the Wage Board’s proposal to an incremental phase in of a smaller increase, as the current recommendations would undoubtedly put businesses under and people out of work.