After two years of hearings and debates, Governor Andrew Cuomo announced that beginning in 2021, employers covered by the New York Miscellaneous Industries and Occupations Wage Order will be required to pay employees the full minimum wage, without any credit for tips employees receive.

The Miscellaneous Industries and Occupations Wage Order covers employers who employ tipped employees in car washes, nail salons and parking garages, among others. According to an Order issued on December 31, 2019 by the Commissioner of the New York State Department of Labor (“NYSDOL”), the tip credit for employers subject to the Minimum Wage Order for Miscellaneous Industries and Occupations will be phased out. On June 30, 2020, the eligible tip credit will be halved. Accordingly, the new scale is as follows:

On December 31, 2020, the tip credit will be eliminated altogether and employees will be permitted to receive the full minimum wage directly from the employer and retain all tips.

The Order issued by the Commissioner does not apply to employees covered by the Hospitality Industry Wage Order which is applicable to restaurants and hotels, an area where most of the debates were focused. Therefore, the tip credit will remain available for servers and other hospitality employees.

Employers covered by the Miscellaneous Industries and Occupations Wage Order should determine whether they have tipped employees who will be affected by the new rates and plan for increased labor costs beginning in June 2020.