What the Tip Credit Really Means to a Restaurant’s Operational Budget
Photo Credit: A check at a restaurant in New York City. Skift Table
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Multiple states are debating whether to eliminate the tipped minimum wage this year. The issue is confusing and contentious, and there are good arguments being made on both sides. Here, we look at how much money the tip credit is worth in New York, and why restaurateurs are so afraid to lose it.
You may have seen a headline or two lately about the heated tipped minimum wage debate, also known as the tip credit. While the issue has been in and out of the headlines for years, a decision on whether to eliminate the tip credit is expected soon from New York governor Andrew Cuomo.
Last month, Washington, D.C. residents voted to eliminate the tipped minimum wage, and last week New York held its last public hearing on whether or not to eliminate it. Both Massachusetts and Michigan are currently mulling legislation on the matter. Seven U.S. states already operate without the tip credit. Maine tried to remove its own tip credit in late 2016 but the elimination was repealed less than a year later due to intense outcry from both staff and owners in the industry.
New York is a powerhouse contributor to the national restaurant industry, which makes it a good barometer for judging the effects of a possible tip credit elimination. According to statistics from the National Restaurant Associ
