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    Judge Finds Amazon Broke Labor Law in Anti-Union Effort

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    The ruling, on charges brought by the National Labor Relations Board, involved actions at two Staten Island warehouses before union votes last year.Amazon violated labor law in advance of unionization elections last year at two warehouses on Staten Island, a federal administrative judge has ruled.The judge, who hears cases for the National Labor Relations Board, ruled on Monday that Amazon supervisors had illegally threatened to withhold wage and benefit increases from employees at the warehouses if they voted to unionize. The judge, Benjamin W. Green, also ruled that Amazon had illegally removed posts on a digital message board from an employee inviting co-workers to sign a petition being circulated by the Amazon Labor Union. The union sought to represent workers at both warehouses.The ruling ordered Amazon to stop the unfair labor practices and to post a notice saying it would not engage in them.In the same ruling, the judge dismissed several accusations brought in a complaint by the labor board’s prosecutors, including charges that Amazon indicated take-home pay would fall if workers unionized; that Amazon promised improvements in a program that subsidizes workers’ educational expenses if they chose not to unionize; and that Amazon indicated that workers would be fired if they unionized and failed to pay union dues.The judge found that these accusations were either overstated or, in the final instance, that the action was not illegal.Amazon can appeal the ruling to the labor board in Washington.“We’re glad that the judge dismissed 19 — nearly all — of the allegations in this case,” Mary Kate Paradis, an Amazon spokeswoman, said in a statement, adding: “The facts continue to show that the teams in our buildings work hard to do the right thing.”The union declined to comment.The violations occurred at a vast Amazon warehouse known as JFK8, where workers voted to unionize in an election whose results were announced in April, and at a smaller, nearby warehouse known as LDJ5, where workers voted down a union the next month.In the weeks before the elections, Amazon summoned employees at the warehouses to dozens of anti-union meetings at which supervisors questioned the credibility of the Amazon Labor Union, emphasized the costliness of union dues and warned that workers could end up worse off under a union.The judge’s ruling set aside a broader question brought by labor board prosecutors: whether employers can force workers to attend such meetings.The meetings are legal under labor board precedent and common among employers facing union campaigns. But the board’s general counsel, Jennifer Abruzzo, has argued that the precedent is in tension with federal labor law and had sought to challenge it.Judge Green concluded that he lacked the authority to overturn the precedent. “I am required to apply current law,” he wrote. Ms. Abruzzo’s office can file an appeal asking the labor board in Washington to overturn the precedent. More

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    U.S. Moves to Bar Noncompete Agreements in Labor Contracts

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    A sweeping proposal by the Federal Trade Commission would block companies from limiting their employees’ ability to work for a rival.In a far-reaching move that could raise wages and increase competition among businesses, the Federal Trade Commission on Thursday unveiled a rule that would block companies from limiting their employees’ ability to work for a rival.The proposed rule would ban provisions of labor contracts known as noncompete agreements, which prevent workers from leaving for a competitor or starting a competing business for months or years after their employment, often within a certain geographic area. The agreements have applied to workers as varied as sandwich makers, hairstylists, doctors and software engineers.Studies show that noncompetes, which appear to directly affect roughly 20 percent to 45 percent of U.S. workers in the private sector, hold down pay because job switching is one of the more reliable ways of securing a raise. Many economists believe they help explain why pay for middle-income workers has stagnated in recent decades.Other studies show that noncompetes protect established companies from start-ups, reducing competition within industries. The arrangements may also harm productivity by making it hard for companies to hire workers who best fit their needs.The F.T.C. proposal is the latest in a series of aggressive and sometimes unorthodox moves to rein in the power of large companies under the agency’s chair, Lina Khan.President Biden hailed the proposal on Thursday, saying that noncompete clauses “are designed simply to lower people’s wages.”“These agreements block millions of retail workers, construction workers and other working folks from taking a better job, getting better pay and benefits, in the same field,” he said at a cabinet meeting.The public will be allowed to submit comments on the proposal for 60 days, at which point the agency will move to make it final. An F.T.C. document said the rule would take effect 180 days after the final version was published, but experts said it could face legal challenges.The agency estimated that the rule could increase wages by nearly $300 billion a year across the economy. Evan Starr, an economist at the University of Maryland who has studied noncompetes, said that was a plausible wage increase after their elimination.Dr. Starr said noncompetes appeared to lower wages both for workers directly covered by them and for other workers, partly by making the hiring process more costly for employers, who must spend time figuring out whom they can hire and whom they can’t.The State of Jobs in the United StatesEconomists have been surprised by recent strength in the labor market, as the Federal Reserve tries to engineer a slowdown and tame inflation.Retirees: About 3.5 million people are missing from the U.S. labor force. A large number of them, roughly two million, have simply retired.Switching Jobs: A hallmark of the pandemic era has been the surge in employee turnover. The wave of job-switching may be taking a toll on productivity.Delivery Workers: Food app services are warning that a proposed wage increase for New York City workers could mean higher delivery costs.A Self-Fulfilling Prophecy?: Employees seeking wage increases to cover their costs of living amid rising prices could set off a cycle in which fast inflation today begets fast inflation tomorrow.He pointed to research showing that wages tended to be higher in states that restrict noncompetes. One study found that wages for newly hired tech workers in Hawaii increased by about 4 percent after the state banned noncompetes for those workers. In Oregon, where new noncompetes became unenforceable for low-wage workers in 2008, the change appeared to raise the wages of hourly workers by 2 percent to 3 percent.Although noncompetes appear to be more common among more highly paid and more educated workers, many companies have used them for low-wage hourly workers and even interns.About half of states significantly constrain the use of noncompetes, and a small number have deemed them largely unenforceable, including California.But even in such states, companies often include noncompetes in employment contracts, and many workers in these states report turning down job offers partly as a result of the provisions, suggesting that these state regulations may have limited effects. Many workers in those states are not necessarily aware that the provisions are unenforceable, experts say.“Research shows that employers’ use of noncompetes to restrict workers’ mobility significantly suppresses workers’ wages — even for those not subject to noncompetes, or subject to noncompetes that are unenforceable under state law,” Elizabeth Wilkins, the director of the F.T.C.’s office of policy planning, said in a statement.The commission’s proposal appears to address this issue by requiring employers to withdraw existing noncompetes and to inform workers that they no longer apply. The proposal would also make it illegal for an employer to enter into a noncompete with a worker or to try to do so, or to suggest that a worker is bound by a noncompete when he or she is not.The proposal covers not just employees but also independent contractors, interns, volunteers and other workers.Lina Khan, the F.T.C. chair, has tried to use the agency’s authority to limit the power and influence of corporate giants.Graeme Sloan, via Associated PressDefenders of noncompetes argue that employees are free to turn down a job if they want to preserve their ability to join another company, or that they can bargain for higher pay in return for accepting the restriction. Proponents also argue that noncompetes make employers more likely to invest in training and to share sensitive information with workers, which they might withhold if they feared that a worker might quickly leave.A ban “ignores the fact that, when appropriately used, noncompete agreements are an important tool in fostering innovation,” Sean Heather, a senior vice president at the U.S. Chamber of Commerce, said in a statement.At least one study has found that greater enforcement of noncompetes leads to an increase in job creation by start-ups, though some of its conclusions are at odds with other research.Dr. Starr said that noncompetes did appear to encourage businesses to invest more in training, but that there was little evidence that most employees entered into them voluntarily or that they were able to bargain over them. One study found that only 10 percent of workers sought to bargain for concessions in return for signing a noncompete. About one-third became aware of the noncompete only after accepting a job offer.Michael R. Strain, an economist at the American Enterprise Institute, said that while there were good reasons to scale back noncompetes for lower-wage workers, the rationale was less clear for better-paid workers with specialized knowledge or skills.“If your job is to make minor tweaks to the formula for Coca-Cola and you’re one of 25 people on earth who knows the formula,” Dr. Strain said, speaking hypothetically, “it makes total sense that Coca-Cola might say, ‘We don’t want you to go work for Pepsi.’”He said that it might be possible to satisfy an employer’s concerns with a less blunt tool, like a nondisclosure agreement, but that the evidence for this was lacking.In a video call with reporters on Wednesday, Ms. Khan said she believed the F.T.C. had clear authority to issue the rule, noting that federal law empowers the agency to prohibit “unfair methods of competition.”But Kristen Limarzi, a partner at Gibson, Dunn & Crutcher who previously served as a senior official in the antitrust division of the Justice Department, said she believed such a rule could be vulnerable to a legal challenge. Opponents would probably argue that the relevant federal statute is too vague to guide the agency in putting forth a rule banning noncompetes, she said, and that the evidence the agency has on their effects is still too limited to support a rule.At the helm of the F.T.C. since last year, Ms. Khan has tried to use the agency’s authority in untested ways to rein in the power and influence of corporate giants. In doing so, she and her allies hope to reverse a turn in recent decades toward more conservative antitrust law — a shift that they say enabled runaway concentration, limited options for consumers and squeezed small businesses.Ms. Khan has brought lawsuits in recent months to block Meta, Facebook’s parent company, from buying a virtual reality start-up and Microsoft from buying the video game publisher Activision Blizzard. Both cases employ less common legal arguments that are likely to face heavy scrutiny from courts. But Ms. Khan has indicated she is willing to lose cases if the agency ends up taking more risks.Ms. Khan and her counterpart at the Justice Department’s antitrust division, Jonathan Kanter, have also said they want to increase the focus of the nation’s antitrust agencies on empowering workers. Last year, the Justice Department successfully blocked Penguin Random House from buying Simon & Schuster using the argument that the deal would lower compensation for authors.One question looming over the discussion of noncompetes is what effect banning them may have on prices during a period of high inflation, given that limiting noncompetes tends to raise wages.But the experience of the past two years, when rates of quitting and job-hopping have been unusually high, suggests that noncompetes may not currently be as big an obstacle to worker mobility as they have traditionally been. Partly as a result, banning them may not have much of a short-term effect on wages.Instead, some economists say, the more pronounced effect of a ban may come in the intermediate and long term, once the job market softens and workers no longer have as much leverage. At that point, noncompetes could begin to weigh more heavily on job switching and wages again.“Doing something like this is a way to help sustain the increase in worker power over the last couple of years,” said Heidi Shierholz, president of the liberal Economic Policy Institute, who was chief economist at the Labor Department during the Obama administration.David McCabe More

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    Workers at Trader Joe’s in Brooklyn Reject Union

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    Workers at a Trader Joe’s store in Brooklyn have voted against unionizing, handing a union its first loss at the company after two victories this year.The workers voted 94 to 66 against joining Trader Joe’s United, an independent union that represents employees at stores in Western Massachusetts and Minneapolis. Workers at a Trader Joe’s in Colorado filed for an election this summer but withdrew their petition shortly before a scheduled vote.“We are grateful that our crew members trust us to continue to do the work of listening and responding to their needs, as we always have,” Nakia Rohde, a company spokeswoman, said in a statement after the National Labor Relations Board announced the result on Thursday.The result raises questions about whether the uptick in union activity over the past year, in which unions won elections at several previously nonunion companies like Starbucks, Amazon and Apple, may be slowing.Union supporters recently lost an election at an Amazon warehouse near Albany, N.Y., and the pace of unionization at Starbucks has dropped in recent months, though the union has won elections at over 250 of the company’s 9,000 corporate-owned U.S. stores so far.Workers at a second Apple store recently won an election in Oklahoma City, however, and unions have upcoming votes at a Home Depot in Philadelphia and a studio owned by the video game maker Activision Blizzard in upstate New York.As of June, Trader Joe’s had more than 500 locations and 50,000 employees across the country and was not unionized. Early in the pandemic, the company’s chief executive sent a letter to employees complaining of a “current barrage of union activity that has been directed at Trader Joe’s” and arguing that union supporters “clearly believe that now is a moment when they can create some sort of wedge in our company.”The company has said it is prepared to negotiate contracts at its unionized stores. An employee involved in the union, Maeg Yosef, said the two sides were settling on bargaining dates.Union supporters at the Brooklyn store had said they were seeking an increase in wages, improved health care benefits and paid sick leave as well as changes that would make the company’s disciplinary process more fair.Before union supporters had a chance to talk with all their colleagues, management became aware of the campaign and announced it in a note posted in the store’s break room in late September. The company also fired a prominent union supporter a day or two later.Amy Wilson, a leader of the union campaign in the store, said organizing had become more difficult after the firing and the note from management.“The last core of people hadn’t been spoken to directly by their co-workers, and we lost them instantly,” she said, referring to the note. “It undermined the trust, the relationship. They felt excluded and offended.”Ms. Rohde, the Trader Joe’s spokeswoman, did not respond to a question about why management posted the break room note. She said that while she couldn’t comment on the firing of the union supporter, “we have never and would never fire a crew member for organizing.”Trader Joe’s is known for providing relatively good wages and benefits for the industry, though workers have complained that the company has made its health care and retirement benefits less generous over the past decade. More

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    How Is Your Company Responding to Labor Organizing? We Want to Hear.

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    Employers are taking a variety of approaches to union campaigns.An Amazon Labor Union rally on Staten Island in April.DeSean McClinton-Holland for The New York TimesMaterials being prepared for workers seeking to unionize Starbucks stores.Tony Luong for The New York TimesThere has been a surge in labor organizing among baristas at Starbucks, warehouse workers at Amazon and retail workers at Apple and Trader Joe’s. They have made their voices heard, though only a fraction of each group has joined a union, and some have rejected unionization.We’d like to hear the voices of those farther from the front lines — managers and white-collar workers at those companies, particularly those at corporate headquarters. If you fit this profile, please consider responding to the questions below. Your answers may help us better understand the state of labor relations and inform our reporting.We won’t publish your name or any part of your submission without contacting you first. If you prefer to share tips or thoughts confidentially, you can do so here.Tell us how your employer is dealing with union efforts. More

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    Starbucks Showdown in Boston Points to New Phase of Union Campaign

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    The company moved to contain the labor push after it took off nationally. Now, with strikes and other tactics, organizers seek to regain momentum.For much of the summer, employees reliably turned up at a Starbucks near Boston University. But instead of going inside to serve coffee, they sat outside in lawn chairs — as part of a strike over what they said was retaliation for unionizing.When passers-by inquired how long the strike would last, workers responded, “As long as it has to.” Ultimately, they shut the store for more than two months, until satisfied that Starbucks would not impose new scheduling requirements in union stores that they said would force some of them to quit. Starbucks said it had told union stores for weeks that there would be no such change and denied retaliating against union supporters.The walkout was one of dozens at unionized Starbucks locations in recent months, meant partly to re-energize a labor organizing effort whose momentum has stalled since the spring and has so far yielded no contract.When workers at three Buffalo-area locations filed for union elections in August 2021, it appeared to catch the company off guard. The campaign spread rapidly, unionizing roughly 250 stores.But election filings dropped from about 70 in March to under 10 in August, ushering in a second phase of the campaign: an uneasy stalemate in which organizers struggled to sign up new stores even as the company was hard-pressed to reverse their gains.“In the context of the size of the organization as a whole, it’s a drop in the bucket,” said David Pryzbylski, a partner at the management-side firm Barnes & Thornburg, alluding to the company’s 9,000 corporate-owned locations. But he added: “Anyone who thinks it’s going back anywhere close to zero is foolish. It’s safe to assume they’ll have at least hundreds of cafes unionized going forward.”That has led to a third phase of the campaign, in which the union, Workers United, has stepped up efforts to win concessions from the company through collective bargaining, which is scheduled for the coming weeks.Some of the concessions sought by the union, like a commitment by the company to stay neutral in future elections, could make it easier for workers to unionize. Others, like paid leave tied to a pandemic, which the company has discontinued, could encourage more workers to join the union by showing it can deliver concrete benefits.But to win such concessions and greatly expand the union’s reach, labor experts say, supporters will almost certainly have to increase pressure on the company, through strikes or other means. And that has heightened the importance of a number of cities — in addition to Boston and Buffalo, places like Eugene, Ore.; Albany, N.Y.; and Ann Arbor, Mich. — where there are several unionized stores, dozens of workers willing to coordinate their actions and a community that is largely sympathetic.“Massing forces in a particular geographic region and attempting to spread the conflagration there has the potential to work,” said Peter Olney, a former organizing director of the International Longshore and Warehouse Union. “I would focus on those metro areas.”One architect of the union’s strategy in Boston is a recent law school graduate named Kylah Clay, who works as a barista at a unionized store.On a blistering afternoon in August, Ms. Clay, wearing a tank top and green army pants, sat outside the Boston University store holding a stack of checks that workers came to collect, courtesy of the union’s Starbucks strike fund.In between, she recalled how she and a colleague had recently ambushed their district manager at another store after he had become slow to respond to their calls and text messages. “We went up to the district manager and started making our demands,” Ms. Clay said. As Ms. Clay tells it, she knew almost nothing about unions before last year, when company officials began pouring into Buffalo after the campaign had gone public. Among them was Howard Schultz, who was between tours as chief executive. “When Buffalo filed, Howard should have kept his mouth shut,” she said. “I would have never gotten involved.”Employees at her store, where she had first worked during law school, and another Boston-area store filed for union elections in December and won their votes in April. Since then, more than 15 stores in New England have also unionized, most of them with her help. Nationwide, the union has won about 250 out of just over 300 votes.But adding to the total has become more difficult. “Stores that are easy to organize, that had people in them who were natural leaders, who were excited about it — those have filed already,” said Brick Zurek, a former Starbucks employee in Chicago who helped organize workers there.Adjustments in the way that Starbucks treats workers have also appeared to play a role. During the early phase of the union campaign, the company generally did not fire workers involved in organizing. But this year, Starbucks began to do so more regularly — like when it fired seven workers in Memphis who were recently reinstated by a federal judge.The National Labor Relations Board issued multiple complaints against Starbucks for firing union supporters, and the agency’s judges have ruled against the company in a few cases so far.Reggie Borges, a Starbucks spokesman, denied that the company had unlawfully forced out workers, saying any increase in disciplinary action against union supporters reflected an increase in violations.In May, the company announced wage increases and new benefits, like faster sick leave accrual, that would apply only to employees of nonunion stores or those not in the process of organizing.Kylah Clay, a recent law school graduate, works at a unionized Starbucks in Boston, and she leads a committee that has helped other stores in New England organize.Tony Luong for The New York TimesJulie Langevin, a worker involved in organizing a Starbucks store near Boston that voted against the union, said several longtime employees in her store relied on Starbucks for health care and had become alarmed that unionized workers might miss out on benefits.“They were extremely concerned that they would actually lose health insurance,” Ms. Langevin said.The labor board has issued a complaint against the company for withholding new benefits and wage increases from unionized employees. Starbucks has said it is forbidden by federal law from adding certain benefits unilaterally in unionized stores.Workers United is an established union with more than 70,000 members across the United States and Canada, but has often relied on Starbucks workers to organize their own stores and plan their own labor actions.Ms. Clay leads a committee that helps New England stores organize, sending out union “starter kits” that include Starbucks Workers United T-shirts and union cards with envelopes addressed to the labor relations board. “I have one closet with 300 shirts in it,” she said in August.She also leads the region’s collective action committee, which came about after workers at a Boston-area store staged a daylong strike over a leaky roof in late May. (Starbucks said the leak had been repaired within a business day.)Six weeks later, as the committee was contemplating a series of daylong walkouts in response to the company’s withholding of new benefits from union stores, workers at the store near Boston University decided to strike. Spencer Costigan and Nora Rossi, two union leaders at the store, which is at 874 Commonwealth Avenue, said workers were fed up with what they described as retaliation for unionizing and the company’s refusal to bargain.“They texted me out of the blue and said, ‘I think we’re ready to do it,’” Ms. Clay said. “Not as many stores were interested at the time. But then they saw 874 and were like, ‘Ah, OK.’” Workers eventually waged strikes that closed five stores for one week; the strike at 874 Commonwealth sprawled across nine weeks.The actions seemed to build support for their cause. The Boston City Council passed a resolution backing the strikers, and politicians, activists, students and other union members joined the picket line at all hours of the day and night.Ms. Clay also leads the region’s collective action committee.Tony Luong for The New York TimesWorkers at the Boston University store called off the strike in late September, a few days after Starbucks posted an announcement to baristas saying stores that had unionized by early July would not be subject to a requirement that workers be available to work at least 18 hours a week. (The requirement would take effect at nonunion stores.)Ms. Rossi said that, before the workers went on strike in mid-July, their manager had pressured some union supporters to increase their availability under the new rule or leave their jobs. Other unionized workers in Massachusetts made similar complaints on a messaging app as recently as early September.Mr. Borges, the Starbucks spokesman, said the rule had never applied to union stores, citing communications to managers in July and a tweet by the Starbucks union the same month. He emphasized that the company had not negotiated with the striking workers or offered them concessions.A few days after the strike ended, Starbucks began sending letters to worker representatives at unionized stores proposing a window for bargaining in October. The union’s president, Lynne Fox, had sought to bargain on a regional or national scale as the union prepared proposals with input from thousands of workers, but the union has accepted the store-by-store approach preferred by the company. Starbucks has nonetheless continued to portray the union as resistant to store-level bargaining.The outcome of the negotiations could reverberate beyond Starbucks. In an email that Geico sent to employees in August, after some workers there began union organizing, the company emphasized that Starbucks had recently offered wage and benefit increases only to nonunion stores. Other large employers are surely watching closely as well.Ms. Clay, for one, believes the stakes are high enough that she has altered her career plans, declining a job in the local public defender’s office so she can stay at Starbucks and push for a contract.“There was some grieving to it — I spent the last five years trying to do that job,” she said. “But you have to go where the wind takes you.” More

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    Battle Over Wage Rules for Tipped Workers Is Heating Up

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    A system counting tips toward the minimum wage is being fought in many places. Critics say it’s often abused. Defenders say workers benefit overall.With Americans resuming prepandemic habits of going out, eating out and traveling, leisure and hospitality businesses have scrambled to hire, sometimes offering pay increases that outpace inflation.But for many whose pay is linked to tips, like restaurant servers and bartenders, base wages remain low, and collecting what is owed under the law can be a struggle.In all but eight states, employers can legally choose to pay workers who receive tips a “subminimum” wage — in some places as low as $2.13 an hour — as long as tips bring their earnings to the equivalent of the minimum wage in a pay period. Economists estimate that at least 5.5 million workers are paid on that basis.The provision, known as the tip credit, is a unique industry subsidy that lets employers meet pay requirements more cheaply. And even in a tight labor market, it is often abused at the employees’ expense, according to workers, labor lawyers, many regulators and economists.“It’s baked into the model,” said David Weil, the administrator of the Wage and Hour Division of the Labor Department under President Barack Obama, referring to the frequency of violations. “And it’s very problematic.”Terrence Rice, a bartender from Cleveland who has worked in the bar and restaurant industry since 1999, chuckled at the notion that the law is consistently followed.“As long as I’ve been doing this, I have never, ever — not one time — met anyone that’s been compensated” for a below-minimum pay period, he said, adding that slow weeks with inadequate pay are viewed as the “feast or famine” norm in the industry. Busier seasons, weekends or shifts can bring a rush of a cash followed by slow weekdays, bad-weather weeks or economic turbulence.Now the yearslong arrangement is coming under increasing challenge.In the District of Columbia, a measure on the November ballot would ban the subminimum wage by 2027. A ballot proposal in Portland, Maine, would ban subminimum base pay and bring the regular minimum wage to $18 an hour over three years.Employers in Michigan are bracing for increased expenses in February, when the state tipped minimum of $3.75 an hour is set to be discontinued and the regular state minimum wage will rise to $12 from $9.87.Xander Gudejko, a district manager for Mainstreet Ventures Restaurant Group, which owns spots throughout Michigan, offered a common view in the local business community: “When I think of the potential positives for us, I can’t really think of anything.”Though tipped employees can include hotel housekeepers, bellhops, car washers and airport wheelchair escorts, most are in food and beverage service jobs. Perfect compliance may involve a complex dance of having workers clock in at the minimum-wage rate for setup work until opening, clock out, then clock back in at a tipped wage.Businesses using the two-tier system are prohibited from having tipped employees spend more than 20 percent of their shifts on side work like rolling silverware or cleaning. They also cannot include back-of-house employees, like kitchen workers, in tip pooling — the collection and redistribution of all gratuities at a certain rate, usually set by the employer.The last robust compliance investigation of full-service restaurants by the Labor Department is somewhat dated, having ended in 2012, but it found that 83.8 percent of the examined firms were in violation of labor law, with a large share of the infractions related to tips.The National Restaurant Association, which represents over 500,000 small and larger restaurants, argues that instances of illegal underpayment of tipped workers are overstated and that workers, customers and employers, in general, find the system workable.“There’s a reason people choose tipped restaurant jobs — they know the economics are in their favor,” said Sean Kennedy, the group’s executive vice president of public affairs. “For many servers, they’ve chosen restaurants as a career because their industry skills and knowledge mean high earning potential in a job that’s flexible to their needs.”Ryan Stygar, a labor lawyer and a managing partner at Centurion Trial Attorneys, whose practice mostly represents workers in wage-theft cases but also defends businesses accused of violations, called the network of laws surrounding tipped workers “so bizarre and obscure” that employers acting in good faith can still make legal mistakes.Even when the law is followed to the letter, Mr. Stygar said, the system is unfair to workers. “You are sacrificing your tips to meet the employers’ minimum-wage obligations,” he said.Employers are required to keep records of tips and usually do so through a mix of their own accounting, credit card receipts and self-reporting from staff members. Most involved in the system say the tracking works in murky ways.“In reality, who’s monitoring this complex two-tier system?” said Sylvia Allegretto, a former chair of the Center on Wage and Employment Dynamics at the University of California, Berkeley.“The onus is on you, the worker, to possibly enrage, or at least annoy, your boss, who also, coincidentally, controls your schedule,” she said.Talia Cella, a training manager at Illegal Pete’s, a fast-casual burrito spot in Boulder, Colo. The restaurant offers starting pay of $15 plus tips as well as health care coverage.Andrew Miller for The New York TimesIn many civil disputes, employment attorneys have successfully argued before courts that managers implicitly wield opportunities to work more lucrative shifts as a carrot for not rocking the boat on workplace abuse and as a stick to prevent retaliation.Sylvia Gaston, a waitress at a restaurant in Astoria, Queens, said her base wage is $7.50 an hour — even though New York City’s legal subminimum is $10, which must come to at least $15 after tips. Ms. Gaston, 40, who is from Mexico, feels that undocumented workers like her have a harder time fighting back when they are shortchanged.“It doesn’t really matter if you have documents or not — I think folks are still getting underpaid in general,” she said. “However, when it comes to uplifting your voices and speaking about it, the folks who can get a little bit more harsh repercussions are people who are undocumented.”Subminimum base pay for some tipped workers in the state, such as car washers, hairdressers and nail salon employees, was abolished in 2019 under an executive order by Gov. Andrew M. Cuomo, but workers in the food and drinks industry were left out.Gov. Kathy Hochul, Mr. Cuomo’s successor, said while lieutenant governor in 2020 that she supported “a solid, full wage for restaurant workers.” And progressive legislators plan a bill in January that would eliminate the two-tier wage system by the end of 2025.When The New York Times asked if she would support such changes, Ms. Hochul’s office did not answer directly. “We are always exploring the best ways to provide support” to service workers, it said.Proponents of abandoning subminimum wages say there could be advantages for employers, including less turnover, better service and higher morale.David Cooper, the director of the economic analysis and research network at the Economic Policy Institute, a progressive think tank, contends that when wage laws are changed to a single-tier system, business owners can have the assurance that “every single person they compete with is making the same exact adjustment,” reducing the specter of a competitive disadvantage.Still, he acknowledged, there would downsides. Restaurants and bars with less popularity and lower productivity could lose out in a substantially higher-wage environment, leading to higher prices and potentially closings.“This is not costless,” Mr. Cooper said. “But for a long time, we haven’t been internalizing the costs of paying workers less than they can live on.”Some employers who could use the two-tier wage system are taking a different approach.Talia Cella, 33, is a training manager at Illegal Pete’s, a burrito spot founded in Boulder, Colo., with locations throughout Arizona and Colorado. Those states have a subminimum wage under $10 an hour for tipped workers, and a regular minimum under $13. Illegal Pete’s offers starting pay of $15 plus tips as well as health care coverage.Before rising to her current position, Ms. Cella was hired as a server and trained as a bartender in 2016. She was previously making base pay of $5 an hour elsewhere as a waitress and hostess, unable to afford a car and biking to the bus stop in snow to make winter shifts.Even at what her company is paying, Ms. Cella said, recruiting and hiring are “more challenging than ever” because of labor shortages. But she said the business, with the help of a recent 10 percent price increase, remained profitable and was able to expand despite soaring food costs.She attributes this, in part, to “out-vibing” the competition.“Having work be a stable part of your life — where it’s like you go there, you’re getting paid a living wage, you have health insurance, you know this place cares about you — then you’re more likely to show up to work and give your best,” Ms. Cella said. “If you want people to give you more of themselves, more of their time, more of their effort, then you have to be willing to invest more of your company into the individual people as well.” More