SUPPORT – A2967 Moya/ S2664 Hamilton

A2967 Moya/ S2664 Hamilton

The Retail, Wholesale and Department Store Union (RWDSU) urges your support for this legislation that would require that car wash workers be paid the full minimum wage and no longer rely on customers to subsidize their wages with tips. Currently, carwashes are covered by the NYS Miscellaneous Industry Wage Order that permits employers to apply a tip credit to the minimum wage paid to workers. This allows these employers to pay tipped employees less than the state minimum wage if employees receive tips sufficient to compensate for the difference. For example, for NYC businesses with eleven or more employees the tipped minimum wage is either $8.30 or $9.35 per hour depending on the amount of tips earned.

The RWDSU represents over 40,000 members in New York State, most of whom work in low-wage industries, including retail, food processing and car washes. Our experience with car wash workers in New York City has given us ample evidence that the car wash industry should not be subject to the tip credit model because it does not operate as other tip credit industries do. Tips are pooled and shared with all workers on a shift. That means that a $2 tip will be shared by the 4-12 workers who wash the car and any workers pulled from the line to do other work, like maintenance, construction, or mechanical work. Moreover, because of the seasonal nature of the industry, and how dependent it is on weather, the volume of work varies day by day and season to season. That means weekly pay also fluctuates. While employers are supposed to ensure that workers earn at least the minimum wage, the reality is that not all employers do.

A review of hundreds of workers’ pay stubs over the years has shown that problems with the proper application of the tip credit are commonplace. Wage theft continues to be part of the car wash business model, leaving thousands of immigrant workers at the mercy of their employers. That is because the tip credit structure is confusing to both employers and employees. Moreover, as a largely unregulated, cash industry with indiscernible ownership structures, there is ample opportunity for carwashes to engage in fraudulent recordkeeping or underreporting with very little oversight by government agencies.

In fact, carwash workers are some of the most exploited workers in New York City.  In 2008, the New York State Department of Labor found that, in New York City alone, four out of every five carwashes were stealing their workers’ wages. Specifically, 79 percent of employers did not pay minimum wage and overtime, nearly 40 percent of employers had managers illegally sharing in tips, and 86 percent of employers committed recordkeeping violations.

This bill would require that car wash workers be paid the full minimum wage and no longer rely on customers to subsidize their wages with tips. Specifically, the bill would remove car wash workers from the Miscellaneous Industry Wage Order. A simplified wage structure for car wash workers would make it easier for workers to predict their weekly pay and would allow employers to more easily maintain records of their payroll. A simplified wage structure would prevent workers’ wages from being stolen and create savings in enforcement efforts by the NYS Department of Labor, Attorney General’s Office and local DA offices.

Therefor this federation urges passage.

For further information, contact the Legislative Department at 518-436-8516.