Client Alert: New York State Minimum Wage Increases
To Our Clients and Friends:
With the coming of the New Year, please remember that New York State’s increased minimum wage and salary requirements are now effective as of December 31, 2018. These changes affect most New York employers, regardless of size, and we are encouraging all our clients with New York operations to become familiar with them. The key wage increases are summarized below for your convenience.
New Minimum Wage Rates
For hourly employees, New York State’s minimum hourly wage rate will increase based on the employee’s geographic location (and the size of the employer) as follows:
| NEW YORK MINIMUM HOURLY WAGE | |
| New York City (11 or more employees) Minimum Hourly Wage:……………………………………………………………… $15.00 Overtime (after 40 hours per week):…………………………………………….. $22.50 | |
| Long Island and Westchester County Minimum Hourly Wage:……………………………………….. $12.00 Overtime (after 40 hours per week):……………………. $18.00 | Remainder of New York State Minimum Hourly Wage:……………………………………….. $11.10 Overtime (after 40 hours per week):……………………. $16.65 |
For salaried employees who are exempt from overtime under the “administrative” and/or “executive” exemptions, New York State’s minimum salary thresholds will also increase (again depending on geography and size of the employer) as follows:
| NEW YORK SALARY THRESHOLDS | |
| New York City (11 or more employees) Weekly Salary Threshold:……………………………………………… $1,125 per week Annual Salary Threshold:……………………………………………. $58,500 per year | |
| Long Island and Westchester County Weekly Salary Threshold:…………….. $900 per week Annual Salary Threshold:……………… $46,800 per year | Remainder of New York State Weekly Salary Threshold:……………………… $832 per week Annual Salary Threshold:………………………. $43,264 per year |
NOTE: The salary thresholds above are in addition to each employee also meeting the relevant “duties tests” (which need to be satisfied to avoid paying overtime).
Update Notice of Pay Rate
Employers are also reminded to update their employee Notices of Pay Rate as well to comply with New York Labor Law § 195(1). The failure to properly reissue these forms, which is required when an employee’s rate of pay is changed (including for minimum wage changes), can lead to significant monetary penalties.
The New York State Department of Labor (NYDOL) has issued sample Notice of Pay Rate forms in various languages and for various types of employees (e.g. exempt, non-exempt, multiple rates, etc.) that employers may use. These forms can be obtained from the NYDOL’s website. The updated Notices of Pay Rate must be filled out accurately and completely, and must be provided in the employee’s primary language (if available). Signed copies should also be given to each employee and signed originals retained by the employer for at least six (6) years.
Hospitality Industry Employers: Update Your Tip Credit Rates Too!
New York Hospitality Industry employers (i.e. hotels, restaurants, and bars) should also note that tip credits, meal credits, and uniform allowance rates also changed effective December 31, 2018. They will be as follows:
| HOSPITALITY INDUSTRY TIP CREDITS | |
| Tip Credit Rates Food Service Employees:………………………………………………………………. $5.00 Service Employees:……………………………………………………………………… $2.50 (if $3.25 tip threshold is met) | |
| Min. Regular Hourly Wage (After Tip Credit) Food Service Employees:……………………………………… $10.00 Service Employees:……………………………………………….. $12.50 ……………………………………………. (if $3.25 tip threshold is met) | Min. Overtime Wage (After Tip Credit) Food Service Employees:……………………………………… $17.50 Service Employees:……………………………………………….. $20.00 ……………………………………………. (if $3.25 tip threshold is met)
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NOTE: Tip credits do not apply to fast food employers and non-service employees. Compliance with the “80-20” rule is also required prior to taking any tip credit (which limits the amount of non-tipped work allowed for each tipped employee/tip pool participant in each workday and workweek).
| HOSPITALITY INDUSTRY MEAL CREDITS |
| Meal Credit Rates Food Service Employees: ……………………………………………………………… $3.60 Service Employees:………………………………………………………………………. $4.15 Non-Service Employees:……………………………………………………………….. $5.15 |
| HOSPITALITY INDUSTRY UNIFORM ALLOWANCES |
| Uniform Allowance Rates High (30+ hours per week):…………………………………………………………. $18.65 Medium (20-30 hours per week):…………………………………………………. $14.75 Low (less than 20 hours per week):………………………………………………… $8.90 |
Hospitality Industry Reminder: Separate Tip Credit Notices Required
In addition to the Notices of Pay Rate, please note that additional tip credit notice requirements also apply to New York Hospitality Industry employers who employ tipped employees:
- Notices of Pay Rate must incorporate the correct “tip credit” (as well as meal credits and other allowances).
- Separate “Tip Credit Notices” are required that include technical language under federal and New York law regarding how the tip credits are applied.
- To the extent you operate a tip pool or tip share, compliant “Tip Pool Policies” must also be updated.
If you operate in the New York Hospitality Industry, please contact us for appropriate forms that contain the compliant Notice of Pay Rate and Tip Credit Notice. Please also contact us to update your Tip Pool Policy (if you operate a tip pool).
Failure to strictly comply with these technical requirements can effectively nullify the tip credits applied to tipped employees (potentially resulting in owed back pay, liquidated damages, and attorneys’ fees).
Hospitality Industry Reminder: Paystub Compliance
As a reminder, tip, meal and other credits/allowances must be accurately displayed on each employee’s paystub to avoid significant monetary penalties. Under New York Labor Law § 195(3), we recommend that you include on each tipped employee’s paystub the full minimum and overtime wage rate, as well as the tip and meal (or other) credit rates, number, and total credits applied. We also recommend out of an abundance of caution that you include any credit card processing fees charged on gratuities on the paystub as well.
For more information about this alert, please contact labor and employment practice head Alexander W. Leonard at (212) 907-7378 or [email protected] or the primary GEABP attorney with whom you work.
Alexander Leonard: 212.907.7378
Email: [email protected]
Lawrence Haut 212.907.7367
Email: [email protected]
Golenbock Eiseman Assor Bell & Peskoe LLP uses Client Alerts to inform clients and other interested parties of noteworthy issues, decisions and legislation which may affect them or their businesses. A Client Alert should not be construed or relied upon as legal advice. This Client Alert may be considered advertising under applicable state laws.
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