CAPITAL REGION Restaurant owners lose appeal over wait staff raise BY KATHY PARKER Gazette Reporter
Restaurant owners have lost a court appeal to lower what they pay employees who receive supplemental income through tips. The New York State Restaurant Association asked the Appellate Division of state Supreme Court to overrule the Labor Department, which required tipped staff to receive raises in their hourly wage for 2005-07. In relation to the federal increases in the minimum wage that rose from $6 an hour in 2005 to $6.75 in 2006 and to $7.15 this year, employees receiving tips as part of their income saw base pay increases from $3.85 to $4.35 and finally $4.60 an hour. The restaurant association argued wait staff and other employees who receive tips should not receive the same percentage bump in pay as other workers. Steve Gouvis, owner of the Malta Diner, said it’s misleading to say waitresses and waiters receive minimum wage. “This is not a minimum wage job,” he said. “The better waitresses and waiters receive a considerable cash cushion from their tips.” He said the state and federal tax collectors require restaurant owners to report their gross sales and collect income tax from tipped employees based on those sales. “The last four or five years, the percentage for me has been 12 percent of the reported gross tax is considered to be equal to the tips income of the employees,” he said. He said that adds about $4.65 an hour to the wait staff’s taxable income, or a total of $9.25, not the federal minimum wage of $7.15 an hour. But, Theresa Hammer, president of the Hotel, Motel and Restaurant Employees Union Local 471, said the majority of people working for tips are not making that much. “Not many restaurants are union shops, so the workers don’t even have benefits,” she said. “There are more people working in cafeterias and small diners than in first-class restaurants where tips are the norm.” She said small eating establishments are less likely to have patrons that tip well or that even leave a gratuity. Restaurant Association spokesman Fred G. Sampson, in an address to the state Wage Board, said he represented more than 8,000 restaurants, catering facilities, food service operations and suppliers from throughout the state who employ 477,000 workers. He said tips more than make up the balance of income received by those workers, and the government should not order further compensation for the employees. “There is also a relationship between menu prices and tip earnings. As an example, it [had] been five years since there [had] been an increase in the minimum wage. In that same five years, food-service management, because of increases in energy costs, rent, taxes, insurance, equipment and food products themselves, have had to increase their menu prices on an average of 5 percent per year, which translates into an aggregate total of 27.6 percent,” Sampson said. “Simply put, it would follow, since patrons tip on the basis of the amount of the check, that tipped employees’ income had increased by the same percentage. So, without an increase in the minimum wage, tipped employees’ earnings have continued to rise and, in fact, usually rise every time management must raise prices. NYSRA thinks it stands to reason to say that tipped employees are not minimum wage employees.” Union representative Hammer said Sampson’s words do not relate to the majority of the servers who earn tips. “I’m sure there are cases where there is no tip at all. But, the waiter or waitress will be taxed on an amount that is supposed to add up to the minimum wage,” Hammer said. The association argued the state labor commissioner could have set the pay hike lower for tipped employees than what the state Legislature enacted as the minimum wage, but the appellate court disagreed. The court decision states that the commissioner was correct in setting the minimum amounts to be paid by employers.
Well then, just pool the tips. That is what quite a few places do now. The tips for that shift go into one pot and it gets divided up among the waiters/waitresses. It will obviously benefit some but not all! I know a girl who waitresses at a bar/resturant in Saratoga and pulls about $200/shift in just tips alone.
When the INSANE are running the ASYLUM In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. -- Friedrich Nietzsche
“How fortunate for those in power that people never think.” Adolph Hitler
And a Jumpin' Jacks, when you give a tip, the workers leave at the end of the day without that. Now, I don't know if they get paid the actual minimum wage or the waiter/waitress wage, but all the tips are held and split up at the end of the year.
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