Is restaurant tipping about to meet its end in New York?

Feb 20, 2015 4:07 PM by CBS News

The battle over tipping may soon erupt into a full-fledged food fight in New York.

The state is considering raising its hourly tipped wage to $7.50 per hour starting December 2015, a proposal that would increase the hourly rates of waiters and waitresses by 50 percent. Tipped wages have been "too low" for New York workers, Governor Andrew Cuomo said in January, expressing support for the measure.

The idea isn't being swallowed easily by restaurants, especially those in New York City, home to a $33.6 billion restaurant industry. Adding to the pain of the Big Apple's eateries is a second provision that would boost the tipped wage to $8.50 per hour in the city, given its higher cost of living. The proposal comes at a time when the tipped wage is in the spotlight, with labor advocates saying it keeps women and minorities, who tend to dominate tipped industries, in poverty.

Of course, there's no guarantee the proposal will make its way into law. Critics have until today, Feb. 20, to file their objections to the measure. Already, one big industry group has marked its displeasure: The New York State Restaurant Association, which called the recommendation "a major blow to New York restaurants." It said a higher tipped wage will lead to fewer hours for tipped workers and hamper restaurants' ability to create jobs. Some restaurants could end up shifting to a no-tipping policy, if the higher wage is enacted.

While New York is considering how to handle wages for tipped workers, the debate is also ongoing at the national level, where tipped workers earn even less than those in New York.

That's because the tipped wage in New York is currently $5 an hour, or about 43 percent lower than the state's minimum wage for all workers, which is $8.75 per hour. The federal tipped wage, however, is even lower, at $2.13 per hour.

One restaurant told NPR that the higher tipped wage will mean he'll have to cut back on servers, potentially hurting service. "I wouldn't be able to have as many waiters as I have here because if I'm overstaffed, the cost is so enormous that it's going to hit me financially," ilili executive chef Philippe Massoud told NPR. "So by default, all of a sudden, I'm going to be understaffed, and the quality of my service is going to go down."

Yet it's not clear that restaurants or patrons actually suffer when the tipped wage disappears. There are 148 restaurants nationwide that pay their workers more than the regular or tipped wage and offer benefits such as paid sick days, or triple the number in 2012, according to the advocacy group Restaurant Opportunities Centers United.

Some restaurants have even banished tips, such as one eatery in Philadelphia that pays its staff about $13 an hour and tells customers that tips aren't necessary. Then, of course, there are the legions of countries that don't have customary tipping and manage to produce good food and good service, such as Japan.

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