Category: Wage & Hour

November 30, 2022

Auditing Your New York Worker Classifications (Webinar Recap)

On November 29, 2022, I presented a complimentary webinar entitled “Auditing Your New York Worker Classifications”. For those who couldn’t attend the live webinar, I’m happy to make it available for you to watch at your convenience.

In the webinar, I discuss:

Employees vs. Independent Contractors
Students & Interns
Minimum Wage/Overtime Exemptions
Pay Frequency
Notice Requirements

and much more!

A complex interplay between state and federal laws makes worker classification a particularly troublesome area for New York employers. With sometimes inconsistent technical requirements, well-intended employers can make mistakes that can lead to significant financial liability. This webinar offers an overview of the key employee status distinctions for purposes such as what compensation, if any, is required and when it must be paid.

Don’t have time to watch the whole webinar right now? Click here to download the slides from the webinar.

Why You Should Watch “Auditing Your New York Worker Classifications”

If your organization misclassifies employees as independent contractors or as exempt instead of non-exempt, then it could result in a wage claim that produces monetary liability well beyond what the worker should have been entitled to.

This webinar is designed to help you prevent costly litigation by classifying employees correctly before issues arise. We address both federal and New York state laws with a focus on practically evaluating worker status in compliance with an array of legal standards.

For some, this ideally would be an in-depth reminder of day-to-day operational matters that have become seemingly routine. For others, it will point out new considerations in the way your company hires or compensates workers. Either way, you don’t want to miss this convenient opportunity to get your workplace on the right track.

Don’t Miss Our Future Webinars!

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November 8, 2022

Heightened Emphasis on Weekly Pay for New York Manual Workers

The frequency with which New York employers must pay their employees depends on the nature of the employee’s work and how they are categorized under New York Labor Law. For relevant purposes, the law classifies private sector (non-governmental) employees under the categories of “Manual Worker,” “Railroad Worker,” “Commission Salesperson,” and “Clerical or Other Workers.” A ruling by a New York appellate court brought new scrutiny to what constitutes a “Manual Worker” and has substantially increased the prevalence of litigation over the subject.

Click here for more on the New York pay frequency requirements for non-manual workers.

Manual Workers

The New York Labor Law states employers must pay manual workers weekly, not later than 7 calendar days after the end of the week in which the employee earned the wages. There are some exceptions to this requirement. for (1) for-profit companies with at least 1,000 employees in the state authorized by the Commissioner of Labor and (2) non-profit organizations. Where the exceptions apply, employers may pay manual workers no less frequently than semi-monthly.

The law defines “manual worker” to mean a “mechanic, workingman, or laborer.” This definition has allowed room for interpretation, but the distinction between manual workers and other categories has not always been among employers’ most pressing concerns.

The New York Department of Labor considers an employee to be a manual worker if they spend at least 25% of their work time doing “physical labor,” which can include an array of physical tasks. In addition to traditional factory or construction work, activities involving heavy lifting, such as moving boxes or luggage, and even mopping or sweeping floors may qualify as physical labor. Even some employees who qualify for so-called “white collar” exemptions to overtime pay requirements might be deemed manual workers.

Vega v. CM & Associates Construction Management, LLC,

175 A.D.3d 1144

This 2019 decision by the First Department of the New York Appellate Division allowed manual workers to sue their employer and recover liquidated damages on late but fully paid wages.

The court stated, “The moment that an employer fails to pay wages in compliance with the [pay frequency laws], the employer pays less than what is required.” Thus, manual workers paid less frequently can seek legal remedies available for underpayment of wages even though they have already been paid the wages owed. Following this opinion, employees are pursuing lawsuits to recover liquidated damages and their attorneys’ fees, amounts potentially larger than the wages initially earned. Previously, such claims typically only resulted in relatively small civil penalties for employers.

The State’s highest court, the Court of Appeals, has not yet weighed in on this ruling.

Classifying Workers

With the stakes now much higher under Vega, defining what constitutes physical labor is increasingly critical for employers.

Many notable retail and hospitality companies are dealing with class action litigation over this subject. These cases may reshape how manual labor is defined within these and other industries. For example, a recent employee complaint cited sizing individuals for suits as an example of physical labor.

Review Your Pay Frequency

Now facing potentially steep damages awards, it is crucial for employers to carefully consider the classification of their employees for pay frequency purposes. Ambiguity in defining what constitutes manual/physical labor allows broad interpretation. Coupled with an onslaught of litigation, employers must proactively protect themselves by reviewing how often they pay all employees in New York.

For the most recent updates on New York employment law, follow Horton Law on LinkedIn.

October 6, 2022

2023 New York Minimum Wage

Do you know the 2023 New York minimum wage? Actually, there are different minimum wages for different parts of the state and different industries. Employers must be ready before the end of the year to meet the new requirements that apply to their employees.

The 2023 New York minimum wage rates are shaded in blue in the tables below. Note that the changes take effect on the last day of the year, not January 1st.

[Follow us on LinkedIn for frequent updates for New York employers.]

Standard New York Minimum Wage

The 2023 New York minimum wage varies by geographic location and sometimes by industry.

For most private employers, the 2023 New York minimum wage in the following chart applies. This chart also applies for non-teaching employees of public school districts or a BOCES. However, 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	12/31/21	12/31/22
NYC – Large Employers (of 11 or more)	$15.00	$15.00
NYC – Small Employers (10 or less)	$15.00	$15.00
Long Island & Westchester	$15.00	$15.00
Remainder of New York State	$13.20	$14.20

* Annual increases for Upstate New York will continue until the rate reaches a $15 minimum wage. 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. The report on the December 31, 2023 increase is available here.

Minimum Wage for Tipped Employees in the Hospitality Industry

New York State has separate minimum wage rules for employees in the hospitality industry. These rules apply to businesses running a restaurant or hotel.

The minimum wage rates 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	12/31/21	12/31/22
NYC – Large Employers (of 11 or more)	$10.00 Cash $5.00 Tip	$10.00 Cash $5.00 Tip
NYC – Small Employers (10 or less)	$10.00 Cash $5.00 Tip	$10.00 Cash $5.00 Tip
Long Island & Westchester	$10.00 Cash $5.00 Tip	$10.00 Cash $5.00 Tip
Remainder of New York State	$8.80 Cash $4.40 Tip	$9.45 Cash $4.75 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	12/31/21	12/31/22
NYC – Large Employers (of 11 or more)	$12.50 Cash $2.50 Tip	$12.50 Cash $2.50 Tip
NYC – Small Employers (10 or less)	$12.50 Cash $2.50 Tip	$12.50 Cash $2.50 Tip
Long Island & Westchester	$12.50 Cash $2.50 Tip	$12.50 Cash $2.50 Tip
Remainder of New York State	$11.00 Cash $2.20 Tip	$11.85 Cash $2.35 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.

As of July 1, 2021, the minimum wage for fast food workers throughout the state is $15.00 per hour. No further increases are currently scheduled.

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

Overtime Threshold

Along with increases to the 2023 New York minimum wage, the salary requirement to maintain some overtime exemptions will also increase.

The salary threshold for New York’s executive and administrative exemptions go up on December 31st. These amounts are all higher than the federal Fair Labor Standards Act (FLSA) threshold of $684/week. But most New York employers (other than governmental entities) must 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 FLSA threshold for most professional employees. Doctors, lawyers, and teachers do not have a salary requirement for exemption.

**Executive & Administrative Exemption Weekly Salary Threshold Schedule**
Location	12/31/21	12/31/22
NYC – Large Employers (of 11 or more)	$1,125.00	$1,125.00
NYC – Small Employers (10 or less)	$1,125.00	$1,125.00
Long Island & Westchester	$1,125.00	$1,125.00
Remainder of New York State	$990.00	$1,064.25

Prepare Now for the 2023 New York Minimum Wage

New York employers should review their compensation levels and make necessary changes by December 31, 2022. Updates might result in 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.

And, remember, the 2023 New York minimum wage rates only last one year in some cases. Companies will have to review this again next year (or sooner).

To keep up on New York and federal wage and hour requirements and other employment law topics, you can sign up for our email newsletter here or follow us on LinkedIn!