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Minimum Wage and Tipped Minimum Wages: The Department of Labor Calls For Increases

As Acting Secretary of the Department of Labor Seth D. Harris stated in his Congressional testimony yesterday, minimum wage workers are increasingly struggling to support themselves and their families.  The value of minimum wage has decreased by 30% since 1968, meaning that thousands of workers still live paycheck to paycheck, even when working full time.  For those who earn a tipped minimum wage, according to Mr. Harris, “the wage their employers are required to pay them has not been raised since 1991 — that is 22 long years ago.”  The Secretary of Labor is now calling for Congress to raise the federal minimum wage from $7.25 to $9.00 an hour.  Tipped minimum wages have similarly lost value over the decades, with the most significant recent drop in 2009 as a result of the recession.  Democratic leaders in Congress and President Obama have called for increases in the tipped minimum wage and hope to pass legislation during the President’s final term in office.

Most restaurant workers are tipped minimum wage employees, meaning that they receive more than $30.00 a month in tips.  New York City in particular is renowned for its multitude of restaurants, and there are more restaurant workers per capita than any other city in the country.  Brooklyn, with a developing nightlife and restaurant scene, has seen an influx of young restaurant workers over the past few years.

If you are a NYC server, bartender, busboy or bar back, you should familiarize yourself with the minimum wage laws to avoid being exploited by an unscrupulous employer which, in the restaurant industry in particular, is a common practice.   Of particular importance is learning how a tip credit is legally applied to the tipped minimum wage since many employers do so illegally, if they are paying a tipped minimum wage in the first place.  For tipped employees, an employer can apply a tip credit against the minimum wage rate. This tip credit cannot exceed $5.12 an hour and the employer must continue to pay the federal tipped minimum wage of at least $2.13 an hour. If you are not receiving this minimum wage, your employer must pay you full minimum wage.  If your tips combined with your tipped minimum wage do not add up to the federal minimum wage, your employer must pay you the difference.  These obligations under the tipped minimum wage must be put into writing and communicated to the employee before an employer can apply a tip credit.

If you are a New York City restaurant worker and are not receiving tipped minimum wage, or if you believe that your tip credit is being improperly implemented, contact a lawyer who has experience in wage and hour laws.

Christopher Davis is an experienced employment litigator specializing in class actions, overtime wage recovery, discrimination, whistleblower retaliation, and Wall Street bonus disputes. Before entering private practice, Mr. Davis served as an Assistant District Attorney in the Manhattan District Attorney's Office where he prosecuted violent crimes as a member of the Sex Crimes Unit.

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