Category: Wage & Hour

December 6, 2017

New York Minimum Wage Increases on 12/31/17

Don’t forget that the New York minimum wage will increase for most employers on December 31, 2018.

Note that the change takes effect on the last day of 2017, not the first day of 2018.

Standard New York Minimum Wage

The chart below shows the current minimum wage and scheduled increases, by geographic location and employer size (where applicable), for most New York private employers. These also apply for non-teaching employees of public school districts or a BOCES. There is no New York minimum wage for other employees of public (governmental) employers (but the federal minimum wage of $7.25 does apply).

**General Minimum Wage Rate Schedule**
Location	12/31/16	12/31/17	12/31/18	12/31/19	12/31/20	2021
NYC – Large Employers (of 11 or more)	$11.00	$13.00	$15.00
NYC – Small Employers (10 or less)	$10.50	$12.00	$13.50	$15.00
Long Island & Westchester	$10.00	$11.00	$12.00	$13.00	$14.00	$15.00
Remainder of New York State	$9.70	$10.40	$11.10	$11.80	$12.50	TBD*

* Annual increases for the rest of the state will continue until the rate reaches a $15 minimum wage. Starting 2021, the annual increases will be published by the Commissioner of Labor by October 1. They will be based on percentage increases determined by the Director of the Division of Budget, based on economic indices, including the Consumer Price Index.

New York Minimum Wage for Tipped Employees in the Hospitality Industry

New York State has separate minimum wage rules for employees in the hospitality industry.

The hospitality industry includes any restaurant or hotel.

The minimum wage for most non-tipped employees in the hospitality industry are set as per the schedule above. However, employers may count a portion of certain tipped employees’ gratuities toward the minimum wage requirements. This is known as a “tip credit.”

New York State has two separate cash wage and tip credit schedules for tipped hospitality employees who qualify as “food service workers” and “service employees.”

Food Service Workers

A food service worker is any employee who is primarily engaged in serving food or beverages to guests, patrons, or customers in the hospitality industry who regularly receive tips. This includes wait staff, bartenders, captains, and busing personnel. It does not include delivery workers.

**Hospitality Industry Tipped Minimum Wage Rate Schedule (Food Service Workers)**
Location	12/31/16	12/31/17	12/31/18	12/31/19	12/31/20	2021
NYC – Large Employers (of 11 or more)	$7.50 Cash $3.50 Tip	$8.65 Cash $4.35 Tip	$10.00 Cash $5.00 Tip
NYC – Small Employers (10 or less)	$7.50 Cash $3.00 Tip	$8.00 Cash $4.00 Tip	$9.00 Cash $4.50 Tip	$10.00 Cash $5.00 Tip
Long Island & Westchester	$7.50 Cash $2.50 Tip	$7.50 Cash $3.50 Tip	$8.00 Cash $4.00 Tip	$8.65 Cash $4.35 Tip	$9.35 Cash $4.65 Tip	$10.00 Cash $5.00 Tip
Remainder of New York State	$7.50 Cash $2.20 Tip	$7.50 Cash $2.90 Tip	$7.50 Cash $3.60 Tip	$7.85 Cash $3.95 Tip	$8.35 Cash $4.15 Tip

Service Employees

The next schedule applies to other service employees. A service employee is one who is not a food service worker or fast food employee who customarily receives tips above an applicable tip threshold (which also follows schedules, not shown here).

**Hospitality Industry Tipped Minimum Wage Rate Schedule (Service Employees)**
Location	12/31/16	12/31/17	12/31/18	12/31/19	12/31/20	2021
NYC – Large Employers (of 11 or more)	$9.15 Cash $1.85 Tip	$10.85 Cash $2.15 Tip	$12.50 Cash $2.50 Tip
NYC – Small Employers (10 or less)	$8.75 Cash $1.75 Tip	$10.00 Cash $2.00 Tip	$11.25 Cash $2.25 Tip	$12.50 Cash $2.50 Tip
Long Island & Westchester	$8.35 Cash $1.65 Tip	$9.15 Cash $1.85 Tip	$10.00 Cash $2.00 Tip	$10.85 Cash $2.15 Tip	$11.65 Cash $2.35 Tip	$12.50 Cash $2.50 Tip
Remainder of New York State	$8.10 Cash $1.60 Tip	$8.65 Cash $1.75 Tip	$9.25 Cash $1.85 Tip	$9.85 Cash $1.95 Tip	$10.40 Cash $2.10 Tip

Fast Food Minimum Wage

Non-exempt employees at some “fast food” restaurants are subject to an alternative minimum wage schedule.

This schedule applies to employees who work in covered fast food restaurants whose job duties include at least one of the following: customer service, cooking, food or drink preparation, delivery, security, stocking supplies or equipment, cleaning, or routine maintenance.

These special New York minimum wage rates only apply to fast food restaurants that are part of a chain with at least 30 restaurants nationally.

**Fast Food Minimum Wage Rate Schedule**
Location	12/31/16	12/31/17	12/31/18	12/31/19	12/31/20	7/1/2021
New York City	$12.00	$13.50	$15.00
Outside of New York City	$10.75	$11.75	$12.75	$13.75	$14.50	$15.00

Note: No tip credit is available for fast food employees.

Overtime Threshold

The salary threshold for New York’s executive and administrative exemptions will also increase on December 31st. These amounts are all higher than the federal Fair Labor Standards Act (FLSA) threshold, which remains at $455/week. But most New York employers (other than governmental entities) have to satisfy the higher New York threshold to ensure full overtime exemption.

There is no salary requirement for New York’s professional exemption. But employers must also satisfy the $455/week FLSA threshold for most professional employees. There is no federal salary requirement to exempt doctors, lawyers, and teachers.

(For more on the FLSA salary threshold, read How Much Should Exempt Employees Get Paid.)

**Executive & Administrative Exemption Weekly Salary Threshold Schedule**
Location	12/31/16	12/31/17	12/31/18	12/31/19	12/31/20	2021
NYC – Large Employers (of 11 or more)	$825.00	$975.00	$1,125.00
NYC – Small Employers (10 or less)	$787.50	$900.00	$1,012.50	$1,125.00
Long Island & Westchester	$750.00	$825.00	$900.00	$975.00	$1,050.00	$1,125.00
Remainder of New York State	$727.50	$780.00	$832.00	$885.00	$937.50	TBD*

Review and Revise Now

New York employers should review their compensation levels and make necessary changes by December 31, 2017. This may mean increasing an employee’s hourly wage or salary or reclassifying exempt employees to non-exempt if they will no longer meet the exemption salary requirement.

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November 13, 2017

New York Commissioned Salesperson Agreements

New York’s Labor Law requires employers to have written agreements with each commissioned salesperson they employ. Employers who don’t satisfy this requirement could run into serious problems down the road.

Who Is a Commissioned Salesperson?

The New York Labor Law uses the terms “commission salesman,” “commission salesperson,” and “commissioned salesperson” interchangeably. I think the last one sounds best, so I use it here.

The law defines the terms to mean “any employee whose principal activity is the selling of any goods, wares, merchandise, services, real estate, securities, insurance or any article or thing and whose earnings are based in whole or in part on commissions.”

But it specifically excludes employees “whose principal activity is of a supervisory, managerial, executive or administrative nature.”

The New York Labor Law also establishes alternative requirements (not discussed here) for “sales representatives” who are independent contractors rather than employees.

Required Agreements

Employers must have a written agreement with each commissioned salesperson that addresses their compensation. Both the employer and the commissioned salesperson must sign the agreement. The employer must retain a copy of the agreement for at least three years.

The agreement must include:

a description of how to calculate wages, salary, drawing account, commissions, and all other money earned and payable;
the frequency of reconciliation for any recoverable draw; and
details about payment of compensation earned and payable upon termination of employment by either party.

It is the employer’s burden to ensure that the necessary document is in place. Otherwise, whatever terms the commissioned salesperson says exist will likely become binding.

Payment Frequency

Employers must pay each commissioned salesperson according to the agreed terms of employment.

Generally, this must be at least once per month and by the last day of the month following the month in which the employee earned the compensation. However, if monthly or more frequent payment of wages, salary, drawing accounts, or commissions are substantial, then the employer may pay additional compensation less frequently than once in each month. The employer must always pay at least as soon as required under the compensation agreement.

Upon written request of a commissioned salesperson, an employer must provide a statement of earnings paid or due and unpaid.

Make Sure You Have Agreements in Place with Each Commissioned Salesperson

Ideally, employers should satisfy these requirements at the time of hire. But you may have employees who change into qualifying roles after they start. Or you might not have put everything in writing. Now is a good time to review your records to make sure you have what you need if there is ever a dispute with a commissioned salesperson over compensation.

Businesses should also periodically review their commissioned salesperson agreements. Do they still reflect the current compensation terms? If not, prepare a new agreement, and get the employee to sign it.

Don’t forget to make sure you’re also complying with the New York Wage Notice Requirements!

October 26, 2017

New York Pay Frequency Laws

Do you know how often you must pay your employees? Federal law does not directly address this issue for most employers. But state laws often do. This post describes the most prevalent New York pay frequency requirements for private employers.

New York’s payday laws do not apply to most public (governmental) employers. Many public employees are in unions and have collective bargaining agreements that dictate their pay frequency. While private-sector collective bargaining agreements often also address wage payment issues, they rarely trump state law.

When New York employers must pay employees depends on the nature of the employee’s work. Let’s look at each of the categories.

Manual Workers

New York’s labor law says that employers must pay “manual workers” weekly. More specifically, not later than seven calendar days after the end of the week in which the employee earned the wages.

The law defines “manual worker” to mean “a mechanic, workingman, or laborer.”

There is an exception for all non-profit organizations, who must pay manual workers at least semi-monthly. The New York Commissioner of Labor can also authorize an exception in the case of for-profit companies with at least 1,000 employees in the state, permitting them to pay manual workers no less frequently than semi-monthly.

Commissioned Salespersons

Employers must have a written compensation plan for all “commissioned salesmen” in New York. Then an employer must pay each commissioned salesperson at least once per month, usually by the last day of the month following the month in which they were earned. If there are substantial recurring monthly wages, then the employer need not pay all forms of compensation on a monthly basis. Certain additional compensation can be paid less frequently than monthly, as set forth in the compensation plan.

The law defines “commission salesman” to mean “any employee whose principal activity is the selling of any goods, wares, merchandise, services, real estate, securities, insurance or any article or thing and whose earnings are based in whole or in part on commissions.” This does not include employees whose principal activity is supervisory, managerial, executive, or administrative in nature.

Other Workers

The labor law requires employers to pay “clerical and other workers” not less frequently than semi-monthly. The employer must pay these employees “in accordance with the agreed terms of employment.” It must also designate regular paydays in advance.

The law defines “clerical and other worker” to mean all employees not included as manual workers, commissioned salespersons, or railroad workers. It also does not include employees who work in an qualified executive, administrative or professional capacity who earn more than $900 per week.

There are also special rules for payment of “railroad workers”.

Final Pay Check

When an employee’s employment ends, the employer must pay all wages earned by the next regular payday for the pay period during which the employment ended.

Sometimes the employer cannot determine the final compensation by that time period. For example, commissions or bonuses may depend on ongoing projects. In these cases, the employer must determine when the compensation will be earned and then pay by the applicable payday.

Review Your Pay Practices

Now is a good time to make sure your company is complying with the New York pay frequency rules. While you’re at it, you should also review these related topics especially for New York employers:

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