Hospitality Wage Order Increases Minimum Wage

Big news for food service workers in New York: the tipped minimum wage has now been increased to $5.00 per hour. This decreases the tip credit to $2.25 an hour.  As always, most workers in New York should be receiving at least $7.25 per hour, the Federally-mandated minimum wage.

The Wage Order is long anticipated and covers things other than hourly wages.

Here are some of the highlights:

• hourly rates of pay are required for all non-exempt employees (except commissioned salespeople). No longer are salaries, weekly or daily rates or piece rates allowed. This is to deter excessively long hours and to encourage compliance with overtime pay requirements of NYS law.
• Overtime pay is due after 40 hours. Previously, residential employees received overtime after 44 hours.
• Spread of hours, call in and uniform maintenance pay is due to all non-exempt employees at any pay rate, not just those paid at or near minimum wage. (Spread of hours refers to pay that is given food service employees who work in the morning or afternoon and leave for a few hours before returning for the evening shift. Call in refers to pay to people who are scheduled for a shift but are sent home before the end of their scheduled shift. Uniform maintenance pay covers cleaning of uniforms.)
• Wash-and-wear Uniforms are exempt from the requirement to pay uniform maintenance to the worker. To qualify, the employee must be provided with the number of uniforms consistent with the average number of days per week worked and the uniform must be able to be laundered with the employee’s personal clothing.
• Gratuities are subject to regulations for the first time in New York. For instance, the Wage Order spells out regulations forbidding tip appropriation by the employer or their agent. Tip sharing, voluntary or employer-mandated, is legal. Employers must give written notice to employees of the tip policy of the establishment.  If the employer mandates tip sharing or pooling or adds charges to the bill for tips, records must be kept of the tips received and distributed. Employees must be allowed to view the records. If a gratuity is added to a credit card, employers are allowed to charge the employee the same percentage that the credit card company charges to process the charge.
• Any charges for administration of a banquet, special function or package deal must be clearly identified and the customer must be notified that the charge is not a gratuity. This notice must be in ordinary, understandable language and in a font not less than 12 points.
• Employee meals. When a shift is long enough to invoke the meal period law (a shift over six hours), employers must either allow employees to bring their own food or give them a meal at no more than the meal credit amount, $2.50 per meal.

This wage order also now combines the restaurant and hotel industries into one class, the Hospitality Industry. New minimum wages are also mandated for tipped employees other than food service workers:

Service Employees now must receive $5.65 per hour, $1.60 maximum tip credit.

Service Employees in resort hotels: $4.90 per hour, $2.35 tip credit if the tips are at least $4.10 per hour.

Chambermaids in resort hotels: merged into service employees in resort hotels. This alters the hourly pay of chambermaids who previously received a minimum wage of $6.15.

Employers have until February 28th in which to make necessary changes to payroll systems and bookkeeping operations but must pay their employees retroactively to January 1, 2011 on the next regularly scheduled payday.

Congratulations, Wait Staff!