New bill proposes eliminating the tip credit system
A new bill has been proposed to eliminate the tip credit system, and it’s got New Yorkers and those in the restaurant industry at a fork in the road.
Many New York City residents tell News 12 that they believe tipping culture has spiraled out of control. The newly proposed legislation would not eliminate tips, but rather put more responsibility to have restaurants pay their employees a proper wage.
A survey conducted in March 2023 by the NYC Hospitality Alliance found that eliminating the tip credit in New York would cost employers an extra $12,000 a year to employ a full-time tipped employee. The alliance says that this would pose major financial challenges for countless restaurants and bars that are still recovering from the COVID-19 pandemic.
"It would be an enormous financial burden on small businesses if it was eliminated,” said Andrew Rigit, executive director of the NYC Hospitality Alliance. “Our survey found that 40% of restaurants would consider eliminating tips at their restaurants because they don't want the overall cost to dine out to be such a knockout to their pockets of purses of their customers."
There is no set date for the New York City Council to vote on this bill proposal at this time.