Tag: hospitality industry

November 23, 2018

2019 New York Minimum Wage

Do you know the 2019 New York minimum wage? Employers must be ready before the end of the year to meet the new requirements.

The 2019 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.

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Standard New York Minimum Wage

The 2019 New York minimum wage varies by geographic location, employer size (where applicable), and sometimes by industry.

For most private employers, the 2019 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	12/31/17	12/31/18	12/31/19	12/31/20	2021
NYC – Large Employers (of 11 or more)	$13.00	$15.00
NYC – Small Employers (10 or less)	$12.00	$13.50	$15.00
Long Island & Westchester	$11.00	$12.00	$13.00	$14.00	$15.00
Remainder of New York State	$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.

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	12/31/17	12/31/18	12/31/19	12/31/20	2021
NYC – Large Employers (of 11 or more)	$8.65 Cash $4.35 Tip	$10.00 Cash $5.00 Tip
NYC – Small Employers (10 or less)	$8.00 Cash $4.00 Tip	$9.00 Cash $4.50 Tip	$10.00 Cash $5.00 Tip
Long Island & Westchester	$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 $2.90 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	12/31/17	12/31/18	12/31/19	12/31/20	2021
NYC – Large Employers (of 11 or more)	$10.85 Cash $2.15 Tip	$12.50 Cash $2.50 Tip
NYC – Small Employers (10 or less)	$10.00 Cash $2.00 Tip	$11.25 Cash $2.25 Tip	$12.50 Cash $2.50 Tip
Long Island & Westchester	$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	$8.65 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	12/31/17	12/31/18	12/31/19	12/31/20	7/1/2021
New York City	$13.50	$15.00
Outside of New York City	$11.75	$12.75	$13.75	$14.50	$15.00

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

Overtime Threshold

Along with increases to the 2019 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, which remains at $455/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 $455/week 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	12/31/17	12/31/18	12/31/19	12/31/20	2021
NYC – Large Employers (of 11 or more)	$975.00	$1,125.00
NYC – Small Employers (10 or less)	$900.00	$1,012.50	$1,125.00
Long Island & Westchester	$825.00	$900.00	$975.00	$1,050.00	$1,125.00
Remainder of New York State	$780.00	$832.00	$885.00	$937.50	TBD*

Prepare Now for the 2019 New York Minimum Wage

New York employers should review their compensation levels and make necessary changes by December 31, 2018. This 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 2019 New York minimum wage rates only last one year in most cases. Companies will have to review this again next year.

To keep up on New York and federal wage and hour requirements and other employment law topics, you can sign up for the Horton Law email newsletter here!

February 6, 2018

Tip Credits Leaving New York?

On December 17, 2017, Governor Andrew Cuomo directed New York’s Commissioner of Labor to schedule public hearings to evaluate the possibility of ending minimum wage tip credits in the State.

Tip credits permit employers to satisfy part of an employee’s minimum wage entitlement through tips earned, rather than cash wages paid by the employer.

Several states (Alaska, California, Minnesota, Montana, Nevada, Oregon, and Washington) have long prohibited employers from using tips received by employees as a credit against their state minimum wages.

Cuomo’s Take on Tip Credits

Governor Cuomo’s announcement strongly suggests a belief that New York should eliminate tip credits.

“At the end of day, this is a question of basic fairness. In New York, we believe in a fair day’s pay for a fair day’s work and that all workers deserve to be treated with dignity and respect,” Governor Cuomo said. “There should be no exception to that fairness and decency. I have directed the Department of Labor to ensure that no workers are more susceptible to exploitation because they rely on tips to survive. I look forward to reviewing the findings of these hearings.”

The press release from the Governor’s office offered that more than 70% of all tipped workers in New York are women. It cited a 2014 study by the Restaurant Opportunities Center asserting that “Workers in states that require the full minimum wage be paid to tipped employees experience half the rate of sexual harassment compared to workers in states that pay lower wages to tipped employees.” The Governor’s release also indicated that “studies have shown that African-American workers are often tipped less than their white counterparts.”

New York Hearings on Tip Credits

New York Commissioner of Labor Roberta Reardon has released a schedule of seven “Hearings on Subminimum Wage” throughout the State. The first one will take place March 12, 2018 in Syracuse. The others will be in Buffalo, Long Island, Watertown, Albany, and New York City.

According to the DOL’s website:

Oral presentations may be strictly limited to 3 minutes each. Priority in seating and speaking will be given to those who preregistered. Seating and speaking order for those who do not preregister will be handled on a first-come, first-served basis as determined by event staff. Written testimony must be submitted to: hearing@labor.ny.gov before July 1, 2018.

Click here for the full hearing schedule.

At the Federal Level

Meanwhile, the U.S. Department of Labor is planning to rescind Obama-era restrictions on employers that pay a direct cash wage of at least the full federal minimum wage and do not claim a tip credit against their minimum wage obligations. The agency published a Notice of Proposed Rulemaking on December 5, 2017, seeking to amend the 2011 rule. The already controversial topic has escalated recently upon reports that the U.S. DOL did not make public its economic analysis regarding the proposed changes to the tip pool rules. On February 5, 2018, the Office of Inspector General of the U.S. DOL initiated an audit of this rulemaking process.

The federal rule change would permit back-of-the-house workers to share in the pooled tips of employees who interact directly with customers. Critics oppose the measure in that it might reduce employee compensation by allowing management to personally participate in tip pools.

At least within the hospitality industry (restaurants and hotels), New York has its own rules regarding tip pooling. In most cases, those requirements would likely make the proposed change to the federal rules irrelevant in New York. Most employers must abide both the state and federal regulations. And it does not appear that the New York tip pooling rules are under reconsideration at this time.

Potential Impact on New York Employers

New York employers who currently rely on tip credits to satisfy a portion of the State’s minimum wage should anticipate paying a higher percentage (perhaps 100%) of the minimum wage in cash by the end of 2018. The State might impose separate rules for those in the hospitality industry and others where employees regularly receive tips.

Losing tip credits may force employers to adjust their prices or other components of their business models. For example, some employers have announced express “no tipping” policies. This allows them to increase what they charge customers without increasing the customers’ overall cost. Employers can then use the additional revenues to pay the minimum wages.

Click here for more information on the current New York minimum wages for both tipped and non-tipped employees.

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*

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

**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

**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.

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.

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