“The boss claims that we make more tips than what we actually do. He has threatened to fire us if we don’t sign papers misstating what we earn. We need to stop all of the abuse and exploitation.”
Those words, from a worker at Las Vegas Car Wash in Brooklyn, N.Y., before he and his co-workers joined the RWDSU and won a union contract, summarize the experiences of far too many employees of New York’s car washes. Despite the progress hundreds of workers have made by winning a union contract, workers throughout the industry continue to be victims of wage theft. Numerous times over the past decade, industry leaders have paid hefty settlements to their workers in cases involving wage theft, even as recently as this year.
One of the contributing factors to this wage theft in New York is the so-called tip credit. The tip credit is a part of New York State minimum wage law that allows industry operators to pay car wash workers a different, lower minimum wage. In theory, workers’ tips are supposed to make up the difference, and possibly more. And, if workers’ tips don’t raise the level of pay to at least the minimum wage, car wash employers are supposed to make up the difference in additional hourly wages.
But tip credit does not work in the car wash environment. It’s a vehicle for wage theft and contributes to systemic underpayment of car wash workers—exactly what the car wash unionizing campaign and car wash workers have been fighting against. Investigations have shown that employers don’t always make up the extra pay for workers when tips are short, and car wash workers don’t always receive the tips customers presume are going into their pockets. We shouldn’t be giving unscrupulous employers additional incentives to underpay their workers, and that’s exactly what tip credit does in the car wash industry.
The solution: passage of legislation currently before the New York State Senate and Assembly that would require car wash workers be paid the full minimum wage. They could still receive tips, but they would also be guaranteed the state minimum wage. This change would help prevent wage theft, and it would help car wash workers better predict their weekly pay.
In the current environment, immigrant workers are under increased stress. The last things they need are the additional worries of having their wages stolen and being underpaid for their hard work. We are calling on the state Legislature to protect them by doing away with the tip credit in the car wash industry, sending a signal to car wash employees that their work is valuable, and to the industry that the state is serious about ending wage theft at the state’s car washes.