Restaurant servers, hotel housekeepers and other tipped workers in New York will soon make $7.50 an hour before tips, the labor commissioner announced Tuesday, a change that will translate into a big raise for thousands of workers throughout the state.

The state allows businesses to pay tipped workers less than the standard $8.75 minimum wage as long as gratuities make up the difference. Currently, servers make a tipped wage of $5 per hour. Other service workers make a $5.65 base wage. Those rates haven’t changed in four years.

The increase to $7.50 goes into effect Dec. 31. It will automatically go to $8.50 an hour in New York City if the city gets permission to raise its local minimum wage.

“My faith that good things can happen in Albany when people step forward to be heard has been restored,” said Sara Niccoli, director of the New York State Labor-Religion Coalition, a group that had pushed for the increase. “Thousands lent their voices to the process through testimony, emails, and calls – and they made an impact. Next up, full elimination of the sub-minimum tipped wage.”

Seven states including California have abolished the tipped wage altogether, meaning service employees are paid at least the minimum wage before tips.

Labor advocates had hoped New York might become the eighth, but restaurant owners warned of higher labor costs that would force them to raise menu prices or reduce hours for workers.

Representatives from the service industry decried Tuesday’s announcement. Melissa Fleischut, president of the New York State Restaurant Association, said the increase should have been phased in to allow business owners to absorb the impact.

“By rubber-stamping an extreme, unprecedented 50 percent increase it becomes hard to believe New York is really ‘Open for Business,'” she said in a statement, mocking the state’s recent marketing campaign meant to encourage business.

The increases were recommended to Labor Commissioner Mario Musolino by a state Wage Board that spent four months taking testimony from servers, labor advocates and restaurant owners. Musolino rejected only one of the board’s suggestions: a plan to allow business owners to pay servers a dollar less if they make significantly more than the minimum wage when tips are factored in.

The state’s minimum wage is set to rise to $9 at year’s end and Gov. Andrew Cuomo and Democratic lawmakers are pushing to raise it even higher in the future. Cuomo has said he’ll support a $10.50 statewide minimum and an $11.50 minimum in New York City.

The median wage for New York’s 133,550 waiters and waitresses is $19,103.

(AP)