It Is Time to End Subminimum Wages

In New York, restaurants are allowed to pay servers a minimum wage of $5 an hour, as long as that hourly wage plus tips equals at least $8.75, the state minimum for nontipped workers (rising to $9 by 2016). That subminimum “tipped” wage is a vestige of the early days of modern labor law, when minimum-wage mandates were riddled with industry-specific exemptions, long since ended. It survives for tipped workers because of the strength of the restaurant lobby.

Last week, a Wage Board convened by the state labor commissioner to propose reforms to the tipped wage issued its recommendations. Regrettably, the board squandered the opportunity to propose ending the subminimum wage altogether. It called, instead, for a somewhat higher tipped wage and a study on whether to eliminate it entirely sometime in the future.

This is an unnecessary delay. Experience and research from eight states that have ended subminimum tipped wages show no adverse effects on growth or jobs in the restaurant industry. What they do show is reduced poverty among the largely female work force of servers.

The board’s proposal, in contrast, would do little to combat poverty. It starts out by calling for a raise in the tipped wage in New York to $7.50 an hour, and $8.50 in New York City if legislators enacted a separate city minimum wage. Those levels would be better than the present $5, but still less than the state minimum wage. To make matters worse, the proposal goes on to say that employers don’t even have to pay the new tipped wage if a server’s weekly wages, plus tips, average out to a sum that is modestly above the full minimum wage. In that case, an employer would need pay only $6.50 an hour outside New York City and $7.50 an hour in the city, in effect, penalizing workers for the tips they earn, while keeping them poor.

Mario Musolino, the acting labor commissioner, has the authority to accept, reject or modify the board’s proposals. He should reject the idea of a two-tiered subminimum wage and use his discretion to extend the full state minimum wage to tipped workers.

Gov. Andrew Cuomo, for his part, should support the commissioner in those moves. The continuation of subminimum wages for tipped workers is a gift to an industry that has been kowtowed to for too long. It smacks of legalized wage theft, and it is unworthy of a state that regards itself as progressive.

A version of this editorial appears in print on February 4, 2015, on page A24 of the New York edition with the headline: It Is Time to End Subminimum Wages.