2023 NY Minimum Wage Guide for Restaurants

2023 NY Minimum Wage Guide for Restaurants

July 19, 2023

What is the minimum wage in New York in 2023?

In 2023, the minimum wage in NY is $14.20. Below is NY minimum wage over the last 10 years:

  • 2013 - $7.25

  • 2014 - $8.00

  • 2015 - $8.75

  • 2016 - $9.00

  • 2017 - $9.70

  • 2018 - $10.40

  • 2019 - $11.10

  • 2020 - $11.80

  • 2021 - $12.50

  • 2022 - $13.20

  • 2023 - $14.20

Source: Labor Law Center

How is the minimum wage set?

The minimum wage is influenced by various factors, and three core variables that often dictate the minimum wage are:

  1. Cost of Living: The cost of living is how much money you need for basics like housing, food, healthcare, and transportation in a specific area. If the cost of living is high, people might demand a higher minimum wage to cover their essential needs.

  2. Inflation and Purchasing Power: Inflation means stuff gets more expensive over time, and money can buy less. To keep the minimum wage valuable, it should increase with inflation. Otherwise, workers might struggle to afford the same things they used to.

  3. Labor Market Conditions: When there are lots of jobs and not enough people to do them, employers might have to pay more to hire and keep workers, including the minimum wage. But when the job market is slow with lots of unemployed people, employers may not feel the pressure to raise wages, even the minimum wage.

State vs. Federal Minimum Wage

The state minimum wage and federal minimum wage are connected through the Fair Labor Standards Act (FLSA), which is a federal law that establishes certain labor standards and protections for employees in the United States. The FLSA sets the federal minimum wage, and states have the option to either adopt the federal minimum wage or set a higher minimum wage that applies within their state boundaries.

Here's how the state minimum wage and federal minimum wage are connected:

  1. Federal Minimum Wage: The federal minimum wage established by the FLSA is $7.25 per hour. This means that, under federal law, covered employees are entitled to earn at least $7.25 per hour for their regular working hours.

  2. State Minimum Wage: Each state has the authority to set its own minimum wage. If a state chooses to set a minimum wage that is higher than the federal minimum wage, employers within that state must comply with the higher state minimum wage.

  3. Higher of the Two: If a state has a minimum wage that is higher than the federal minimum wage, employees in that state are entitled to receive the higher rate. The state minimum wage takes precedence over the federal minimum wage.

  4. Lower of the Two (Preemption): If a state's minimum wage is lower than the federal minimum wage, employers must follow the federal minimum wage rate instead. The FLSA preempts state laws that provide for a lower minimum wage than the federal standard.

How Improve Tips & Gratuity for Staff

Restaurant margins are thin! So the best way to improve compensation for your staff is to improve gratuity. It’s a win win for restaurant owners, customers, and both sides of the house.

  1. Allow Credit Card Tipping: One of the best ways to increase tips is to give your guests a fast and easy way to pay! This will also improve your overall sales and speed of serving guests.

  2. Increase Your Table Turn Over Rate: The math is simple: the more customers you serve, the more tips you’ll make! If you can serve your guests within 45-minutes each (which is a great table turn over rate), your staff will enjoy big tip pools every night!

  3. Encourage Up Sales with Staff: The goal is to increase the size of the bill! If you’re servers can consistently increase the average bill size by 5-10%, that will directly increase their tip pools.

  4. Hire Rockstar Hosts and Hostesses: A very strong greeting for guests can set the stage for big tips! The opposite can happen as well. Don’t go cheap on your host staff! From the customer’s perspective they want short wait times, acknowledgement of their reservations and friendly attention. To achieve this in the midst of a busy service is not easy.

  5. Table-side POS Service: POS handheld tablets increase your overall sales, speed up guest service, and create a ton of convenience for guests. All of this will lead to higher tips for your staff!

Tips to Improve Restaurant Margins

Higher margins create more opportunity to compensate competitively in the restaurant industry. And with higher compensation comes higher quality staff who stick around (not always, but usually!) Here are some tips to improve those margins:

  1. Menu Engineering: Check out which menu items bring in the most money and promote them. Adjust prices, portions, and ingredients to make more profit while keeping customers happy. Try using popular or unique ingredients to justify higher prices for certain dishes.

  2. Cost Control: Keep an eye on food and beverage costs by managing inventory, cutting waste, negotiating with suppliers for better deals, and thinking about bulk purchases. Review the menu regularly to adjust prices for items with changing ingredient costs.

  3. Upselling and Cross-selling: Train your staff to upsell the high-profit items or suggest extra add-ons to increase the bill size. Encourage them to make personalized recommendations based on what customers like.

  4. Improve Operational Efficiency: Make things run smoother to save on expenses. Use cool tech like point-of-sale systems, online orders, and reservation platforms to speed up service. Schedule staff smartly for busy times and avoid spending too much on labor during slow periods.

  5. Marketing and Loyalty Programs: Invest in cool marketing to get new customers and keep the regulars coming back. Set up loyalty programs to reward repeat visits and keep people happy. Happy customers will spread the word, so you'll save on finding new ones.

Closing Thoughts

In conclusion, understanding the minimum wage regulations and compensation strategies for restaurant workers in NYC is essential for both employers and employees. By staying informed about the current minimum wage laws and implementing effective tips to improve compensation, restaurant owners can create a thriving work environment, attract top talent, and ensure that their hardworking staff feels valued and motivated to deliver exceptional service, ultimately contributing to the success and growth of their establishments.

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