Employers in the state of New York in the hospitality industry have the option of combining an employee's wages with an hourly tip credit to satisfy the state's minimum wage requirements.
Here is everything you need to know about the tipped minimum wage in New York State as well as the 80/20 rule that defines the rate.
New York Tipped Minimum Wage
In New York, employers with hospitality businesses have the option of paying employees a combination of an hourly wage and tip credit.
The following table shows the minimum hourly wage and tip credit requirements in New York for service employees as well as food service workers. The values below are combined to satisfy New York State minimum wage requirements.
Note that the rates below reflect both the effective 2026 and 2027 New York tipped minimum wage.
| New York City | Long Island & Westchester County | Rest of New York State | |
| Service Employees | $14.15 Wage $2.85 Tip Credit |
$14.15 Wage $2.85 Tip Credit |
$13.30 Wage $2.70 Tip Credit |
| Food Service Workers | $11.35 Wage $5.65 Tip Credit |
$11.35 Wage $5.65 Tip Credit |
$10.70 Wage $5.30 Tip Credit |
It is important to be aware of the tipped minimum wage requirements to avoid hefty New York Labor Law Penalties and Fines.
What Are Tip Credits in New York?
Tip Credits are credits or allowances for tips that the employee receives from customers.
Example: An employer in New York City could pay food service workers $12.00 an hour, even though the minimum is $17.00 an hour, if they also ensure the worker receives $5.00 in tips per hour.
What Is the 80/20 Rule for Tipped Minimum Wage in New York?
Governed by the New York State Department of Labor (NYS DOL), employers must follow the 80/20 rule, which prevents them from using tip credits to satisfy New York minimum wage requirements if the employee spends more than two hours, or 20% of a shift, doing non-tipped work.
Additionally, employers can not use tip credits to satisfy New York minimum wage requirements when service employees receive tips that are less than the average tips per hour. Note that the amounts below reflect the average tips per hour for 2026 and 2027.
| Service Employee Type |
New York City | Long Island & Westchester County | Rest of New York State |
| In Resort Hotels | $9.55 | $9.55 | $9.00 |
| In Restaurants & All-Year Hotels | $3.65 | $3.65 | $3.40 |
Previously, the Biden Administration reinstated and revised the Federal 80/20 Rule in December 2021. However, in December 2024, the US Department of Labor (US DOL) rescinded the rule on the federal level. This has no impact on the New York State 80/20 Rule, as the State’s minimum wage, with the tip credit, is greater than the Federal minimum wage.
As a reminder, employers still need to follow and satisfy New York overtime requirements, which generally mirror the FLSA provisions.
Get Help With New York Payroll
Knowing how much you are required to pay employees in New York is just the first step to a compliant payroll process. There are many other requirements to be aware of, including things such as pay schedule requirements under New York Pay Frequency Requirements. Or, in the case of wage rates, any time an employee's pay changes in New York, employers must provide a New York Wage Theft Prevention Notice.
If your business is having trouble with tipped wage compliance or other areas of New York Payroll Laws, you may want to reach out to a New York Payroll Company for help.
Contact us today to understand how we help New York businesses with payroll processing, or take a look at our payroll demo video recording to learn more about the payroll solutions we offer.
