BILL NUMBER: S415A
SPONSOR: JACKSON
 
TITLE OF BILL:
An act to amend the labor law, in relation to providing for minimum wage
requirements for miscellaneous industry workers; and to amend the tax
law, in relation to establishing the one fair wage reimbursement credit
 
PURPOSE:
Provides for minimum wage requirements for miscellaneous industry work-
ers; appropriation
 
SUMMARY OF PROVISIONS:
Section 1 amends Section 196-d of Labor Law to allow tip sharing by
waiters with all employees.
Section 2 amends Section 651 of the Labor Law by adding new subdivision
10 to define "miscellaneous industry workers."
Section 3 amends subdivisions 2 and 4 of Section 652 the Labor Law to
set a schedule on which cash wages for food service workers, service
employees, and miscellaneous industry workers will increase until that
wage is equivalent to the minimum wage. In New York City, the cash wage
for food service employees receiving tips will be as follows:
$12.77 per hour on or after January 1,2026
$14.88 per hour on or after January 1,2027
$17.00 per hour on or after January 1,2028
Beginning on January 1, 2029, the cash wage cannot be less than the
minimum wage.
In Nassau, Suffolk, and Westchester Counties the cash wage for food
service employees receiving tips will be as follows:
$12.77 per hour on or after January 1, 2026
$14.88 per hour on or after January 1, 2027
$17.00 per hour on or after January 1, 2028
Beginning on January 1, 2029, the cash wage cannot be less than the
minimum wage.
In all other counties, the cash wage for food service employees receiv-
ing tips will be as follows:
$11.50 per hour on or after January 1,2026
$13.00 per hour on or after January 1,2027
$14.50 per hour on or after January 1,2028
$16.00 per hour on or after January 1,2029
Beginning on January 1, 2029, the cash wage cannot be less than the
minimum wage.
For miscellaneous industry workers receiving tips pursuant to 12 NYCRR
part 142 working in New York City must not be less than the cash wage
rate described pursuant to subdivision 1-a(a) of Section 652 of the
Labor Law.
For miscellaneous industry workers receiving tips pursuant to 12 NYCRR
part 142 working in the Nassau, Suffolk, and Westchester counties must
not be less than the cash wage rate described pursuant to subdivision
1-a(b) of Section 652 of the Labor Law.
For miscellaneous industry workers receiving tips pursuant to 12 NYCRR
part 142 working in all other counties must not be less than the cash
wage rate described pursuant to subdivision 1-a(c) of Section 652 of the
Labor Law.
Section 4 amends subdivision 2 of Section 653 of the Labor Law, to
ensure that the wage order under this subdivision does not authorize a
wage lower than the previously and statutorily authorized minimum wage.
Section 5 amends the tax law by adding a new section 50 that creates a
one fair wage reimbursement credit eligible to taxpayers who pay wages
to tipped workers at the rates prescribed in section 3 of this bill and
sets a schedule for which the tax credit rate decreases.
For the year 2026 the tax credit is equal to the product of the total
number of hours during the taxable year worked by eligible employees for
which they were paid at the minimum wage rate and $1.50.
For the year 2027 the tax credit is equal to the product of the total
number of hours during the taxable year worked by eligible employees for
which they were paid at the minimum wage rate and $1.30.
For the year 2028 the tax credit is equal to the product of the total
number of hours during the taxable year worked by eligible employees for
which they were paid at the minimum wage rate and $1.20.
For the year 2029 the tax credit is equal to the product of the total
number of hours during the taxable year worked by eligible employees for
which they were paid at the minimum wage rate and $1.10.
For the year 2030 the tax credit is equal to the product of the total
number of hours during the taxable year worked by eligible employees for
which they were paid at the minimum wage rate and $1.00.
Section 6 amends Section 210-B of the tax law by adding a new subdivi-
sion 61 to stipulate guidelines on the allowance and application of the
one fair wage reimbursement credit.
Section 7 amends subparagraph (B) of paragraph 1 of subdivision (i) of
Section 606 of the tax law by adding a new clause (lii) referencing the
one fair wage reimbursement tax credit.
Section 8 amends Section 606 of the tax law by adding a new
subsection(qqq)by referencing the allowance and application of the one
fair wage reimbursement credit.
Section 9 amends Section 1511 of the tax law by adding a new subdivision
(ff) by referencing the allowance and application of the one fair wage
reimbursement credit.
Section 10 sets forth a severability clause.
Section 11 sets forth the effective date.
 
DIFFERENCE BETWEEN ORIGINAL AND AMENDED VERSIONS:
The amended version of this bill updates the schedule on which cash
wages for food service workers, service employees, and miscellaneous
industry workers will increase to start in 2026. The amended bill also
creates one fair wage reimbursement credit.
 
JUSTIFICATION:
For many years, employers of food service employees have been provided
with a credit that reduces the hourly minimum wage paid to employees
receiving gratuities. These employers now pay $7.50 per hour to workers,
so long as workers receive on average the difference between their
reduced minimum wage and the statutory minimum wage in tips, which has
led to a subminimum wage. Allowing for the tip credit has created many
inequities in food service work.
Employees who are not made whole by gratuities face arduous legal proc-
esses to recover their owed wages, involving complicated record- keeping
and inadequate legal remedies. Reliance on tips has also created an
environment where workers are victimized, and in some cases, encouraged
to turn a blind eye, to rampant discrimination and sexual harassment by
clientele and managers. This results in annual restaurant employee sexu-
al harassment claims to the EEOC at five times the rate of other indus-
tries. Eight states (Alaska, California, Maine, Minnesota, Montana,
Nevada, Oregon, and Washington) have eliminated the tipped credit and
required employers to pay the full minimum wage to employees. Those
states have seen growth in the restaurant industry and a more equitable
and experienced workforce. Washington, DC and Portland, Maine have also
passed this via ballot initiative.
New York's two-tiered wage system presents challenges for employers as
well as workers. Unlike many other laws, wage and hour laws put the onus
on employers to keep accurate records and follow the law, which take up
large amounts of time and money in monitoring compliance. Maintaining
the necessary records and compliance of a two-tiered wage system exposes
employers to additional liability.
In short, it is time for New York to join other states and improve the
working conditions in the restaurant industry by eliminating the sub-mi-
nimum wage. Employers would not be prohibited from allowing for restau-
rant gratuities, but gratuities would no longer make up the difference
between wages received from the restaurant and the actual minimum wage.
Providing equity and fairness to restaurant workers would help reduce
the wage gap and bring New York in line with many of its sister states
in workers' rights and fairness on the job. This bill puts tipped work-
ers in food service on a path to receive the full minimum wage by 2029.
The bill also updates New York law considering recent changes in federal
Department of Labor regulations on tip sharing. These changes now allow
tip sharing between all employees, including those who work in "back of
house" roles, such as cooks and dishwashers, and those who do not
receive tips. However, this practice is currently barred under New York
State law. This bill will allow tip sharing among all employees to
ensure greater equity in wage earning between front and back of house
employees.
 
LEGISLATIVE HISTORY:
2023-2024: S. 5567-A- REFERRED TO FINANCE/ A. 1710-A referred to labor
2021-2022: S.808-A - Amend and Recommit to Labor/A.10203 - Referred to
Labor
 
STATE AND LOCAL FISCAL IMPLICATIONS:
To be determined.
 
EFFECTIVE DATE:
This act shall take effect immediately.

Statutes affected:
S415: 196-d labor law, 651 labor law, 653 labor law, 653(2) labor law, 210-B tax law, 606 tax law, 1511 tax law
S415A: 196-d labor law, 651 labor law, 653 labor law, 653(2) labor law, 210-B tax law, 606 tax law, 1511 tax law