Under current law, as in Ohio, employees who receive tips may be paid less than the minimum wage so long as they earn enough tips to bring them up to the actual minimum wage. For certain businesses, this no longer will fly in New York. This a trend that may spread to other states.
The rationale is that, while tipping in certain industries is not uncommon, it is not consistent and employees cannot rely on tips for wages. Further, the tip is intended to supplement the worker’s income, not be a substitute for wages. Some of the industries affected are hair, beauty and nail shops, car washes, dog groomers and parking valets.
While the US Dept of Labor allows a “tip-credit” to be applied to minimum wage, it is looking at changing the rules. New York isn’t waiting and this is a trend that may extend into other states.
Food service and other hospitality workers that expect tips as part of the service are not included in this change.