New York State Department of Labor Publishes Final Wage Orders for the Hospitality Industry
The long awaited Hospitality Industry Wage Orders are finally here. The New York Department of Labor (“DOL”) issued a proposed Wage Order in October 2010. The final Wage Order is substantially similar to the proposed Wage Order. Below we have highlighted just a few of the changes.
1. Effective Date
The Wage Order goes into effect January 1, 2011. While employers are encouraged to be in compliance by that time, the Department has said it will allow employers until February 28, 2011 to implement the changes. As of March 1, 2011, all employees covered by the Wage Order must be paid any additional wages owed to them under the new rules, computed retroactively to January 1.
2. Minimum Wage
Food service workers must be paid $5.00 per hour, plus a permissible tip credit of no more than $2.25 per hour. Tipped service employees must be paid $5.65 per hour, plus a permissible tip credit not to exceed $1.60 per hour.
3. “Spread of Hours” Pay
Employers are still obligated to provide “spread pay,” which is an additional hour of pay, at the regular minimum wage, on any day that an employee’s workday lasts longer than 10 hours between the start of the first shift and end of the second. However, this rule has been expanded to apply to all non-exempt employees, regardless of their regular wage rate.
4. Tip Pooling
In a small, but significant victory for employers, the DOL has made it permissible for employers to require eligible tipped employees participate in a tip pool. The Wage Order provides the following tipped occupations are eligible to participate in a tip-sharing arrangement: (1) wait staff; (2) counter personnel who serve food or beverage to customers; (3) bus persons; (4) bartenders; (5) service bartenders; (6) barbacks; (7) food runners; (8) captains who provide direct food service to customers; and (9) hosts who greet and seat guests.
5. Tip Credit Notification
An employer must provide written notice to its tipped employees of its tip credit system in order to be permitted to take a tip credit. This notice must be provided to new hires and prior to any change in pay rates, and must be provided in English and any other language spoken by the employee as his or her primary language. The Commissioner is currently developing templates to accommodate various languages.
In another small victory for the employer, the new Wage Order provides for a wash and wear exception to the uniform allowance pay requirements, and states that an employer is no longer obligated to pay the uniform allowance if the uniform can be laundered with other garments and does not require dry cleaning or other special treatment. Also, no allowance is required if the employer makes available frequent use of a free laundry service and informs the employee in writing. Also, the Wage Order excludes from the definition of “uniform” anything that can be a part of an employee’s “ordinary wardrobe,” which is defined as “basic street clothing selected by the employee where the employer permits variation in dress.”
However, the uniform allowance must be paid, where applicable, regardless of an employee’s regular rate of pay. Under the old rule, payment was due only if the employee’s weekly hourly earnings would be less than the minimum wage due to the ‘uniform cleaning expense.”
There are a number of other rules in the Wage Order that have not been addressed in this article, including, but not limited to, credit card fees, service charges, meal credits, and record keeping requirements. An employer should be aware of all of the new rules that go into effect on January 1. A copy of the final Wage Order will be posted on the DOL’s website.
Mr. Doren is the Managing Attorney of the firm's Buffalo Office. His practice covers the full range of labor and employment services on behalf of management. Mr. Doren concentrates his activities in the area of employment litigation (discrimination, wage and hour, breach of contract, class actions, etc.) in state and federal courts and before the state and federal agencies (EEOC and NYSDHR). His services include counseling and assistance in administration of personnel labor relations, both union and non-union, including union avoidance counseling, collective bargaining and representation of employers before the NLRB and in labor arbitrations. Mr. Doren has particular experience in compliance with state and federal prevailing rate regulations concerning employee compensation on public construction projects, as well as safety regulations under OSHA