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Business/Economy

Minimum wage is up again, while tip credits are changing

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Eileen Buckley
/
WBFO News

The minimum wage is now higher in Western New York. And for some who earn tips as part of their income, there are changes in their employers' tip credits.

On the final day of 2020, the minimum wage increased from $11.80 per hour to $12.50 per hour for workers in all parts of the state except New York City, Long Island and Westchester County.

The tip credit allows an employer to take some of a worker’s tipped wages per hour and claim it as credit against the required minimum wage. There are several new tip credit rates covering various employees who typically receive a tip as part of their service.

As of the new year, employers of non-food service workers including delivery staff or bathroom attendants may claim up to $2.10 from hourly tips against the minimum wage, if the employee is earning at least $2.70 per hour in tips. Resort hotels may also claim a $2.10 per hour tip credit for their non-food service workers, but that is provided the affected employees earn at least $7.00 in tips per hour.

Food service employers, with the exception of fast food, may claim up to $4.15 per hour in tips against the minimum wage.

For some jobs, the state is no longer allowing employers to utilize the tip credit. Jobs covered include parking lot attendants, valets, hair dressers, nail salon workers, skycaps and other non-hospitality workers.

The minimum wage increase is just the latest to come once a year since 2016. Albany is gradually raising the minimum wage statewide to $15.00 per hour.

That's already the going rate in New York City, which saw no change at the start of the new year. In Long Island and Westchester, the minimum wage is now $14.00 and is scheduled to increase to $15.00 at the end of 2021.

A decision on how much to increase the minimum wage for the rest of the state is expected by the State Department of Labor on or around October 1.

(Click here for a tip credit calculator.)

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