After years of organizing, downstate New York’s car wash workers — also known as carwasheros — have reached a landmark in their battle to receive the full minimum wage from their employers. The state’s senate and assembly both passed bills earlier this month to end the subminimum tipped wage for carwasheros, a move that could simplify a confusing pay system that has allowed employers to exploit a largely immigrant population for years.
Under the current law, car washes may use the tip credit, which allows employers to pay a subminimum wage to tipped employees, with tips making up the rest of their pay. But if New York Gov. Andrew Cuomo signs the bill into law, employers will be required to pay at least a full minimum wage to carwasheros in New York City, and Nassau, Suffolk and Westchester counties.
In addition to leaving worker pay subject to the whims of customers, the complicated tip credit system makes car wash workers particularly vulnerable to wage theft. Technically employers must ensure workers make a full minimum wage, but enforcement is lax, if it’s even there at all. Some car wash workers received justice in court, winning millions in stolen backpay from their employers through lawsuits and organizing that spanned years. But the law could bring structural changes to an industry that practically bakes wage theft into its business model.
“For far too long car wash workers in New York have earned poverty wages under the tip credit law. Today, the New York State Assembly made clear that our legislature recognizes that this abhorrent loophole has left immigrant workers susceptible to wage theft,” Stuart Appelbaum, President of the Retail, Wholesale and Department Store Union, said in a statement.
“As a result of the work of both chambers passing this legislation, over 5,000 workers will now have a chance to earn fair wages for their work. Governor Cuomo has long been a supporter of justice for car wash workers and we look forward to him signing this bill into law.”
But car wash workers are not the only ones excited. Other tipped workers hope that the end of the tip credit in one industry will help pave the way forward for a single fair minimum wage across the board.
“ROC NY is excited that car wash workers in the NYC area have won One Fair Wage. When any worker moves forward we all move forward,” Serena Thomas a worker organizer for the Restaurant Opportunities Center New York told Inequality.org in an email. “But there are still tipped workers, most of whom are women, in the restaurant industry and nail salon industry that are subject to the subminimum wage. Tipped workers that are women live in poverty at higher rates, access food stamps at higher rates, and their dependence on tips leaves them to experience high rates of sexual harassment in the workplace.”
“We hope that the momentum of the car wash worker victory will move Governor Cuomo to pass One Fair Wage for all tipped workers across the state,” Thomas said. “We will continue to fight for One Fair Wage, and we hope that the example of one industry moving transitioning from the subminiumum wage will show that other sectors can do it as well.”
Luis Gomez, the Director of Organizing for Workers United, agreed. “It provides hope for other tipped workers in New York state,” Gomez said, especially the nail salon workers who face similar wage issues. Gomez has seen issues of pay structure clarity come up through his work with the New York Nail Salon Workers Association, which is a project of Workers United.
Thanks to the tip credit, there’s a lack of pay consistency for both car wash workers and nail salon workers, Gomez said. Customers don’t always know if either profession is tipped, or how much they should leave behind. Employer-paid wages are different based on the size and location of the employer. “It’s all these different variables that cause confusion about what they should be getting paid, said Gomez.
If a worker’s base wage plus tips is less than the full minimum wage, employers are required to pay the difference. But this puts the onus on the worker to ensure they get their full wages — a system that’s impractical at best, and abusive at its worst. Like carwasheros, nail salon workers are also a largely immigrant workforce, something employers often exploit. “Even though it’s mostly men in the workforce,” Gomez said of car wash workers, “people’s immigration statuses are often leveraged against them.”
“We see the same thing in the nail salon industry — the need for a clear pay system, where people know how much they should be earning regardless of where their salon is located, or how many people work there.”
Restaurant workers and nail salon workers are continuing to organize in New York and around the country to end the tip credit. And they’ve received some high-profile attention in recent weeks from one former tipped worker — Rep. Alexandria Ocasio-Cortez, who was a bartender before her historic Congressional run. Ocasio-Cortez returned to her former profession last month in support of the campaign for a full minimum wage.
“All labor has dignity,” Ocasio-Cortez told workers and media at the event. “And the way that we give labour dignity is by paying people the respect and the value that they are worth at minimum. We have to make one fair wage and we have to raise the national minimum wage to $15 an hour, nothing less.”