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Changes to New York’s Minimum Wage Now Effective

In accordance with legislation signed into law by Governor Cuomo in April 2013, New York’s minimum wage (formerly $7.25 per hour) increased to $8.00 per hour as of December 31, 2013. As a result, the effective minimum overtime rate has jumped to $12.00 per hour. These changes are the first of three staged increases in the State minimum wage, with the rates rising to $8.75 and $9.00 on December 31, 2014, and December 31, 2015, respectively.

The increase in the State’s minimum wage has additional implications for employers. For instance, companies that classify employees as exempt executive or administrative employees must be sure to raise such employees’ minimum weekly salary from $543.75 to $600.00 as of December 31.

In a rare reprieve for employers in the hospitality industry, the New York State Department of Labor (DOL) has issued proposed regulations providing that food service workers (such as waiters, bartenders, and other employees primarily engaged in serving food or beverages to guests) may continue to receive a minimum direct wage of $5.00, meaning that an employer tip credit of $3.00 (up from $2.25) will now be permitted, so long as the tips actually received by the employee bring his or her total hourly compensation to at least $8.00. For other service employees regularly receiving tips, such as coat and bathroom attendants, the minimum direct wage will remain at $5.65, resulting in an increased permitted tip credit of $2.35 per hour (up from $1.60).

Subject to the DOL’s guidance and implementation requirements, numerous other New York regulations will be affected by the minimum wage increases, including rules relating to employee uniform maintenance pay, meal and lodging allowances, and the building services industry.

In light of these changes (and similar 2014 minimum wage increases in other states, such as California, New Jersey, and Connecticut) employers should take the opportunity to review their wage and hour practices and consider whether any payroll adjustments will be required.

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Employment Notes, a newsletter produced by Tannenbaum Helpern Syracuse & Hirschtritt LLP’s Employment Law practice, provides insights on recent employment caselaw, legislation and other legal developments impacting employer policies, human resource strategies and related best practices. To subscribe to the newsletter, email marketing@thsh.com.

01.01.2014  |  PUBLICATION: Employment Notes  |  TOPICS: Employment

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