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With Americans resuming pre-pandemic 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, the New York Times reported. 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.” 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.

A Manhattan deli known as the nation’s oldest cheese shop was forced to declare bankruptcy amid a lawsuit over the back rent it owes, the New York Times reported. Alleva Dairy in Little Italy filed for chapter 11 on Tuesday in the wake of the tourism-starved pandemic years, according to shop owner Karen King. “Today is one of the saddest days in the 130-year history of this illustrious Little Italy landmark,” King said in a statement after the filing. “We will continue to strive to keep Alleva Dairy alive.” The store, which first opened on Grand and Mulberry streets in 1892, is in jeopardy of closing due to $509,106 in rent it failed to pay during the pandemic, according to a lawsuit filed in April by its landlord.

The economy is weakening, big companies from Ford Motor Co. to Facebook’s parent are cutting jobs or freezing hiring and inflation is eating into household budgets. Yet for many small-business owners, finding workers is as difficult as ever, the Wall Street Journal reported. The challenges are prompting some entrepreneurs to seek more creative ways to fill labor shortages at a time they might have expected hiring to get easier. More than one-third of small businesses said hiring challenges had worsened in the three months ended Sept. 1, according to a Goldman Sachs survey of nearly 1,500 small-business owners. Forty-seven percent of them said finding and retaining qualified employees was the most significant problem small businesses faced, up from 43% in the survey released in June. Nearly 60% of small companies report that worker shortages are affecting their ability to operate at full capacity, according to a September survey of more than 725 small-business owners by Vistage Worldwide Inc., a business coaching and peer advisory firm. Southeast Constructors Inc. in Des Moines, Iowa, is addressing the labor shortage by creating its own training school. The new academy, set to open early next year, will offer three months of instruction in construction basics such as how to hang drywall, paint and drive a Bobcat. The heavy-construction firm hopes to hire some graduates of the program, which is expected to start with 50 students.