New York Could Change Tipping Rules for Counter-Service Restaurants — What Bill A9008 Would Do, Why It’s Controversial, and How Other States Handle It

• New York bill A9008 would let counter-service restaurants create tip pools that include kitchen staff (cooks, dishwashers) as long as all workers earn at least the full minimum wage and managers/owners are excluded.
• Today in New York, back-of-house workers generally can’t share in customer tips under the Hospitality Industry Wage Order—tip sharing is limited to service employees/food service workers, not kitchen staff.
• The bill was referred to the Assembly Labor Committee on Aug. 13, 2025. It’s not law yet.
• The push stems from Simone’s Kitchen (Schenectady), which pooled tips among counter and kitchen workers and then discovered state rules blocked it; the NY Restaurant Association has publicly backed the fix.
• Public opinion cuts the other way: 72% of Americans say the fairest approach is for servers to keep the tips they personally receive, not pool them.

What the bill actually says (A9008)

Headline changes if passed:

• Defines “counter-service restaurant” as where customers order and pay at a counter/kiosk with minimal/no table service.
• Authorizes tip pooling that includes both customer-facing and kitchen staff (but no managers/owners).
• Eligibility requires paying all workers at or above minimum wage.
• Transparency rules: clear posted notices and daily distribution records kept for six years.
• Enforcement lives within Labor Law via a new §196-e.

Status: Introduced and referred to Labor (08/13/2025). No floor vote yet; details may change during committee.

How New York law works today (and why the bill is needed)

New York’s Hospitality Industry Wage Order permits tip sharing and pooling, but only among “service employees” and “food service workers.” Those categories are front-of-house roles (servers, bartenders, bussers). Kitchen roles are excluded, which is why counter spots that tried to split tips with cooks hit a legal wall.

• Tip pooling is legal, but who can be in the pool is the sticking point.
• The Wage Order also lays out recordkeeping and notice requirements for any pool.

Real-world spark:
Simone’s Kitchen’s owner, Bashir Chedrawee, had been sharing tips with everyone behind the counter—until a state Labor review said back-of-house can’t be in the pool under current rules. That moment triggered Assemblymember Angelo Santabarbara to file A9008 to clarify/expand who can share. The NY State Restaurant Association has thrown support behind the bill.

The federal backdrop (what’s already allowed under U.S. law)

At the federal level, the Fair Labor Standards Act (FLSA) allows two very different worlds:

• If an employer takes the federal tip credit (i.e., pays below full minimum wage in cash and uses tips to reach the minimum): tip pools can’t include non-tipped roles (like cooks) and managers/supervisors are barred.
• If an employer pays full minimum wage in cash and takes no tip credit: it may include non-tipped employees (e.g., cooks, dishwashers) in a mandatory, “non-traditional” tip pool—still no managers. The DOL’s 2020–2021 rules clarified that.

Translation for New York: Federal law already allows kitchen-inclusive pools if there’s no tip credit—but state law can be stricter. A9008 would align New York’s state rules with that federal non-tip-credit approach specifically for counter-service restaurants.

Why supporters say A9008 is “modernizing” tipping

Equity & team reality

• In counter-service formats, kitchen speed/consistency drives guest experience as much as the cashier. Supporters argue all contributors should share tips, not only the person who hits the tablet.

Administrative clarity

• Operators get a clear, state-level green light to pool tips across roles if they pay at least minimum wage to everyone and exclude managers, plus meet disclosure/recordkeeping requirements.

Industry endorsement

• The New York State Restaurant Association has publicly supported the bill as a fair way to distribute tips in counter-service settings.

The core criticisms

Public fairness norms

• A Pew Research Center study found 72% of Americans think the fairest system is each server keeps the tips they personally receive. Only 14% favor pooling among all staff. This suggests customer expectations may clash with back-of-house pools.

Service-quality incentives

• Critics worry pooling blunts individual performance incentives—if a standout counter lead splits the same as a slower peer, motivation may dip and turnover could rise. (Advocates counter that team-wide KPIs can offset this.)

Complexity & compliance

• Calculating distributions, posting policies, and keeping daily records for six years add admin work and risk if done sloppily.

How other states handle similar questions

There’s no one model. Some states ban tip credits, others allow BOH in pools only if no tip credit, and a few limit employer-mandated pooling outright.

State snapshots

* Federal overlay: If a restaurant does not take a tip credit and pays full minimum wage, federal rules allow including non-tipped roles in a pool (no managers). State law can still be stricter.

What industry voices are saying

Proponents (industry)

• NY State Restaurant Association: backs pooled tips for counter-service spots to “fairly distribute tips” when everyone earns at least minimum wage and managers are out.
• Some operators argue BOH inclusion reduces wage gaps and improves retention for high-demand kitchen roles—especially in fast-casual where the guest experience is truly team-produced. (This is the Simone’s Kitchen argument.)

Skeptics (worker & policy advocates)

• Pew’s data highlights consumer resistance to pooling—and that matters because guests drive the tips.
• Think tanks & advocates spar on pay models:
  • Economic Policy Institute (EPI) and Center for American Progress link subminimum wages to inequities and instability, favoring one fair wage models.
  • Employment Policies Institute (EPIonline) and some NBER work warn that raising tipped minimums/eliminating tip credits can reduce jobs/income for tipped workers, pushing restaurants toward service fees.

Bottom line: Even among experts, data point both ways depending on what’s changing (pooling rules vs. tip credit elimination), local costs, and consumer behavior.

What this means for New Yorkers (diners & workers)

For diners

• Expect more “we pool tips across our team” placards at counters if the bill passes.
• If you prefer direct-to-person tipping, you may want to hand cash to a specific worker—though many counter spots will automate pooling on the POS.
• Given 72% of Americans prefer individual retention, operators should message clearly so guests don’t feel blindsided by the split.

For workers

• Kitchen staff could see a meaningful bump from tip pools at high-volume counters.
• Front-of-house/counter leads might see more stable but slightly lower peaks if pools are wide.
• Team norms (expo speed, order accuracy) will matter more; soft skills still count at the counter.

Operator playbook: if A9008 becomes law

Step-by-step rollout

1. Decide on tip-credit posture:
   • To include kitchen staff, run on full minimum wage (no tip credit) to keep both federal and (if A9008 passes) state rules clean.
2. Draft a written policy that covers:
   • Who’s in the pool (roles, not names).
   • Distribution formula (e.g., hours-weighted points; sample below).
   • Exclusions: managers/supervisors never participate.
3. Post clear notices and train your team on the math and timing. Keep daily distribution logs for six years if the NY bill’s recordkeeping language remains.
4. Align POS & payroll:
   • Configure tip mapping by role.
   • Export pool reports that tie out to pay stubs (DOL expects “fully redistributed within the pay period” when the employer facilitates).
5. Stress-test guest messaging:
   • At the tablet: “Tips are shared by our entire team, including our cooks. Thank you.”
   • On receipts and menu boards: short, friendly FAQ.

A simple, transparent formula (example)

• Points: Cashier = 1.0; Line cook = 1.0; Dish = 0.7; Floater = 0.8.
• Payout = (Role points × hours) ÷ (sum of all points × hours) × daily tip jar.

This discourages favoritism, avoids fights over registers, and matches fairness to contribution.

Compliance checklist (New York + federal)

• ☐ No managers/supervisors in the pool—ever.
• ☐ All participants make at least minimum wage in cash pay.
• ☐ Notices posted, policy acknowledged, daily records kept.
• ☐ Employer-facilitated pools are redistributed within the pay period and fully traceable in payroll.

How New York’s proposal compares to national trends

• Federal DOL already contemplates kitchen-inclusive pooling when no tip credit is taken; A9008 codifies that flexibility specifically for counter-service in New York.
• Other jurisdictions have zig-zagged on tipped wage structures:
  • D.C.’s Initiative 82 (to end the tip credit) just got scaled back by the Council in July 2025, reflecting the pressure restaurants feel from stacked cost increases.
  • Maine ended its brief “no tip credit” experiment by restoring the tip credit in 2017 after worker and operator pushback.
  • California, Washington, Minnesota forbid using tips to meet minimum wage (no tip credit), but they diverge on whether and how employers may mandate pooling beyond the “chain of service.”

Inference: New York is not abolishing the tip credit or standard tipping; it’s target-tuning who can share tips in counter-service settings, aligning state rules with federal allowances where restaurants already pay the full cash minimum.

Consumer sentiment & the UX problem

A policy can be technically sound yet feel wrong to customers. Pew finds that most people want their tip to go to the person they interacted with. If A9008 passes, front-of-house UX matters:

• At-kiosk copy: “We pool tips among the whole team—cashiers and cooks—so everyone who makes your meal possible shares your thanks.”
• Receipts: Include a brief line and a QR to a one-minute explainer.
• Staff scripts (for questions): “We all earn at least minimum wage. Tips are a bonus that we split to keep the line fast and food great.”

That sort of clarity can ease friction at the screen and protect check averages while respecting guest intent.

Scenario planning: what could happen next?

If A9008 advances as drafted

• Expect fast-casual brands to adopt kitchen-inclusive pools in NYC and across New York State.
• Wage compression between cashier and cook could ease—useful for BOH retention.
• Some operators may flatten variable pay volatility for front-of-house by pairing pools with small hourly bumps.

If A9008 stalls

• Counter-service operators stay in the current gray zone: FOH-only pools and workarounds like service fees or “kitchen appreciation” lines that can confuse guests and invite scrutiny. (D.C.’s recent turmoil shows how quickly service-fee policies become political.)

FAQs

For operators: a lightweight implementation plan you can copy

Policy one-pager (print and post)

• Purpose: “To fairly distribute customer tips among the entire counter-service team that creates the guest experience.”
• Eligibility: Non-managerial hourly roles (cashier, line cook, dishwasher, runner). Managers are excluded.
• Wage floor: All participants earn ≥ minimum wage in cash pay.
• Distribution: Hours-weighted points per role; daily close payout recorded.
• Records: Daily distribution log retained six years.
• Disclosure: Notice at POS, on menu board, and employee handbook.

Metrics to watch (first 90 days)

• Order-to-ready time (kitchen pace)
• Refund/comp rate (quality)
• Guest NPS at kiosk (clarity of pooling message)
• FOH/BOH turnover (retention signal)
• Total tips per labor hour (is the pool hurting help-seeking prompts?)

The bigger question

Tips started as a way to reward individual service. Counter-service blurs that line: who, exactly, created your experience—the person who tapped your order in, or the team that cooked it right and fast?

A9008 won’t settle the American tipping debate. But for New York’s counter spots, it could better match how these restaurants actually work—a line of people moving as one. Whether customers embrace the shift will come down to clear communication and consistent execution.