The Tip Theft Prevention Act, introduced in the City Council last week, aims to protect food service workers from stolen tips and union-busting tactics.
After Brooklyn food service workers noticed their paychecks were lower than expected, they realized tips left by customers paying with credit or debit cards were not reaching them. They brought their concerns to Council Member Shahana Hanif, who represents a swath of Brownstone Brooklyn in District 39.
“Workers deserve every penny that they’ve earned,” Hanif said in a statement. “I’m proud to be introducing the Tip Theft Prevention Act to ensure that workers receive the tips that customers have left for them in full. Daily reports on tips are an important mechanism to stop wages from being stolen.”
With the support of Council Members Sandy Nurse (D-Brooklyn) and Carmen De La Rosa (D-Manhattan), Hanif brought Intro. 1182 to the City Council floor, with the hopes of addressing a growing problem in the food service industry.
The restaurant industry experiences the highest rate of wage theft among all sectors, according to One Fair Wage. One Fair Wage and Workers United NY NJ Regional Joint Board, long-time labor rights organizers, helped Hanif develop the legislation.
Labor organizations point to a lack of transparency, the unreliability of the subminimum wage (where workers are paid less than the minimum wage), and insufficient worker protections as key factors making service workers particularly vulnerable to union-busting tactics and wage theft.
“Many tipped workers already struggle to receive their base pay due to the subminimum wage, and without clear records of their earnings,” said Saru Jayaraman, president of One Fair Wage. “They have no way of knowing if they are being shortchanged.”
The proposed law aims to implement accountability measures by requiring employers to submit daily reports of tips. The Tip Theft Prevention Act also targets illegal union-busting tactics, which have become more prevalent as efforts to unionize workplaces have gained popularity.
In January, a Park Slope Starbucks closed just months after its staff successfully unionized. A Starbucks spokesperson told Brooklyn Paper that the decision to close the store, which had been operating for more than two decades, was due to the expiration of its lease.
The closure comes six months after another unionized Starbucks, the Astor Place location in Manhattan, closed in July 2024. The company cited rent hikes as the reason for the closure. Before shutting down, Starbucks was accused of engaging in union-busting tactics.
“After my team at Astor Place unionized, Starbucks punished us by stripping our customers of the ability to tip by card,” said Kai, a former Starbucks employee. “Before we successfully organized to get them to restore card tipping, this union-busting tactic caused real financial struggle for us.”
While Astor Place workers were pushing to unionize, Starbucks introduced an option for customers to tip on card transactions at all non-union stores nationwide. However, the option to tip on a card was removed at unionized stores, according to Hanif’s office.
Starbucks chose to rescind the policy after mounting pressure from the Starbucks Workers United union.
Hanif’s legislation would build on that victory, she said, by proactively requiring all businesses that employ tipped workers and accept payment for food and drink via card to also accept tips via card.
Nurse, who represents parts of eastern and central Brooklyn in the City Council, praised the legislation as a step in the right direction.
“Exploitative business owners have taken advantage of the lack of transparency, effectively stealing from their workers,” Nurse said in a statement. “We are fighting back against wage theft, and Council Member Hanif’s Tip Prevention Act is a step towards ensuring fair pay and accountability.”
