'Tipped wage' is unfair, but isn't tipping, too?

Update below:

On Thursday, a state panel may recommend that New York raise or eliminate the so-called "tipped wage" -- the $5 an hour paid to restaurant workers and others who receive tips.

Labor leaders and other advocates have been lobbying the Cuomo administration to eliminate the wage, which affects nearly 230,000 people in the state.

In this blog, my colleague Tom Tobin noted that some coffeehouses do not allow employees to accept tips. I understand Tom's desire to tip servers, but also understand why some businesses don't allow it. If employees accept tips, they are required to report them to their bosses, who then are required to report them to the Internal Revenue Service. That's an accounting expense some businesses don't want to incur.

There are many good reasons to eliminate the tipped wage, and I hope that's the recommendation of Gov. Andrew Cuomo's Wage Board. But maybe there's a better solution, which is to eliminate the practice as part of the American restaurant system.

That's what a handful of higher-end restaurants are doing. The latest, in Pittsburgh, plans to pay its servers $35,000 a year and offer them health care and shares in the company. And it will do so without raising prices.

Time will tell if the owner can keep doing that; restaurants can and do fail. But as someone who worked in restaurants in high school and college, I support eliminating a demeaning and capricious system based on customers' whims.

Why should a waitress take home less on Thursday than she did on Wednesday, simply because some customers were stingier than usual? Further, some servers endure sexual harassment by customers in silence, fearing the loss of tips if they complain. Eliminating that variable would undoubtedly improve the workplaces in many establishments.

Fast-food restaurants already include the full cost of labor in their prices. Maybe it's time for sit-down restaurants and other businesses where tipping is customary to do the same.

Update:The latest from The Associated Press is below. The Wage Board basically punted until its next meeting.

Servers, busboys and hotel housekeepers in New York could soon get a raise, though not as big as labor advocates want.

State law allows servers and other tipped workers to make less than the state's minimum wage of $8.75 an hour as long as their tips make up the difference. For servers, the base wage is $5. For other tipped workers, it is $5.65.

On Thursday, the State Wage Board considered the so-called tipping wage in its plans to recommend a figure to the state labor commissioner, who will make the final decision.

The three-member board discussed, but did not approve, a recommendation to raise the wage to the state's minimum. Instead, the board decided to consider at the next meeting a recommendation to raise the tipping wage to $7 an hour.

Labor advocates want the board to eliminate the tipping wage altogether and require tipped workers to be paid the standard minimum wage before tips. But business groups warn that significant increases in the cost of labor will hurt businesses.

Board Chairman Timothy Grippen made the $7 an hour proposal, noting that the tipped wage hasn't been increased in proportion to the minimum wage for some time. He said $7 an hour for both food service workers and other tipped workers would bring their wages back in line with others paid the minimum.

"It makes sense to get it back to where it should have been," he said.

The board split over the question of eliminating the tipped wage altogether or raising it to match the current minimum wage, which is set to rise from $8.75 to $9 at the end of the year.

Board member Peter Ward, president of the New York Hotel Trade Council, said the tipped wage is confusing and unfair. But Board member Heather Bricetti, president of the Business Council of New York State, argued it would hurt business owners and jeopardize the jobs of workers to significantly increase the wage.

"The people who will lose the jobs won't be the employers," she said. "It will be the wait staff."

Grippen declined to weigh in, saying the decision of whether to eliminate the tipped wage should be made by lawmakers and Gov. Andrew Cuomo not an unelected board.

Labor advocates, who say there's no reason to pay tipped workers less than others, were displeased with the proposed increase to $7. "We would like to see it higher, significantly higher," said Michael Kink, executive director of the Strong Economy for All Coalition.

The board is expected to submit its recommendation within the next month.