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The basics of tipping laws in New York

On Behalf of | Apr 9, 2021 | Employment Law |

Many people who work in the service industry and hospitality industry in New York rely on tips to supplement their wages. Therefore, it is important that they have a basic understanding of tipping laws in New York State, so they can understand if their rights are being violated.

What is a tip credit?

New York law permits employers to meet their minimum wage obligations by combining a “cash wage,” which they pay and a tip credit that workers receive from customers, i.e. money that the employer does not have to pay employees if the amount of tips earned adds up to the minimum wage. Employers are required by law to give workers written information about the tip credit and are tasked with ensuring their workers have earned enough in tips to meet the minimum wage. If tips earned amount to less than the minimum wage the employer must make up the difference.

Example: Food service workers

Let’s look at an example of minimum wage and tip credit: food service workers. Many people in New York City work in the food service industry. These workers are entitled to a minimum wage of $15.00 per hour. The hourly cash wage employers must pay is $10.00 plus a $5.00 tip credit. However, the minimum wage is not the same everywhere in New York. In Nassau, Suffolk and Westchester, employers must pay $8.65 per hour plus a $4.35 tip credit per hour, adding up to a minimum wage of $13.00 per hour. And, in the rest of New York State employers must pay $7.85 per hour plus a $3.95 tip credit to meet the minimum wage of $11.80 per hour.

Learn more about wage and hour laws

Ultimately, this post is for informational purposes only and does not contain legal advice. Those who want to learn more about wage and hour laws in New York are encouraged to explore our firm’s website for further information on this important topic.