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The New York State Department of Labor (NYSDOL) recently proposed amended regulations that would significantly alter the salary levels for some executive and administrative exempt employees, as well as alter the permitted tip credits and uniform maintenance pay for New York hospitality employers. Just in time for the new year, the NYSDOL adopted the proposed regulations and released the final orders, which will be effective as of December 31, 2016.It also issued FAQ guidance on the increased minimum wage level levels.
Salary Basis Thresholds for Executive and Administrative Exempt Employees
The increased salary thresholds for the New York executive and administrative exemptions are set forth in a schedule of changes based upon the employer’s location and size:
Table 1: Salary Basis Thresholds for Executive and Administrative Exempt Employees
|
|
New York City |
New York City |
Nassau, Suffolk, and Westchester Counties |
Remainder of New York State |
|
On and After December 31, 2016 |
$825.00 per week |
$787.50 per week |
$750.00 per week |
$727.50 per week |
|
On and After December 31, 2017 |
$975.00 per week |
$900.00 per week |
$825.00 per week |
$780.00 per week |
|
On or After December 31, 2018 |
$1,125.00 per week |
$1,012.50 per week |
$900.00 per week |
$832.00 per week |
|
On or After December 31, 2019 |
|
$1,125.00 per week |
$975.00 per week |
$885.00 per week |
|
On or After December 31, 2020 |
|
|
$1,050.00 per week |
$937.50 per week |
|
On or After December 31, 2021 |
|
|
$1,125.00 per week |
|
Notably, the wage orders adopt the federal rate if it is higher than the applicable New York state rate. While the status of the increased federal thresholds currently remains uncertain, should the federal rate exceed the New York state rates after December 31, 2016, the higher rate applies.
Tip Credits and Uniform Maintenance Pay
The revised order also significantly alters the permitted tip credits and other deductions for hospitality industry and other employers. In addition to the schedules detailed below, the amended orders also contain similar schedules for tip and other credits at resort hotels and all-year hotels. The amendments also change the permitted meal and lodging credits by restaurants and all-year hotels. For all tip credits and other deductions, New York employers are encouraged to refer to the revised order.
A. Tip Credits for Hospitality Employers
The NYSDOL’s amendments significantly adjust the amounts and types of tip credits that hospitality industry employers may deduct from an employee’s wages. Covered employees must receive at least the applicable hourly “cash wage” (i.e., wages paid excluding tips), and tip credits may not exceed the hourly “credit” rate (as indicated in the schedule below), provided that (i) the weekly average of tips meet the hourly “tip threshold” rate, and (ii) the actual total of tips received plus wages equal or exceed the basic minimum hourly rate in place at the time.
Table 2: Service Employees (Other Than Those at Resort Hotels)
|
|
New York City |
New York City |
Nassau, Suffolk, and Westchester Counties |
Remainder of New York State |
|
On and After December 31, 2016 |
$9.15 cash wage, $1.85 credit, $2.40 tip threshold |
$8.75 cash wage, $1.75 credit, $2.30 tip threshold |
$8.35 cash wage, $1.65 credit, $2.15 tip threshold |
$8.10 cash wage, $1.60 credit, $2.10 tip threshold |
|
On and After December 31, 2017 |
$10.85 cash wage, $2.15 credit, $2.80 tip threshold |
$10.00 cash wage, $2.00 credit, $2.60 tip threshold |
$9.15 cash wage, $1.85 credit, $2.40 tip threshold |
$8.65 cash wage, $1.75 credit, $2.25 tip threshold |
|
On or After December 31, 2018 |
$12.50 cash wage, $2.50 credit, $3.25 tip threshold |
$11.25 cash wage, $2.25 credit, $2.95 tip threshold |
$10.00 cash wage, $2.00 credit, $2.60 tip threshold |
$9.25 cash wage, $1.85 credit, $2.40 tip threshold |
|
On or After December 31, 2019 |
|
$12.50 cash wage, $2.50 credit, $3.25 tip threshold |
$10.85 cash wage, $2.15 credit, $2.80 tip threshold |
$9.85 cash wage, $1.95 credit, $2.55 tip threshold |
|
On or After December 31, 2020 |
|
|
$11.65 cash wage, $2.35 credit, $3.05 tip threshold |
$10.40 cash wage, $2.10 credit, $2.70 tip threshold |
|
On or After December 31, 2021 |
|
|
$12.50 cash wage, $2.50 credit, $3.25 tip threshold |
|
Table 3: Food Service Workers (Other Than Fast Food Employees)
|
|
New York City |
New York City |
Nassau, Suffolk, and Westchester Counties |
Remainder of New York State |
|
On and After December 31, 2016 |
$7.50 cash wage, $3.50 credit, $11.00 total |
$7.50 cash wage, $3.00 credit, $10.50 total |
$7.50 cash wage, $2.50 credit, $10.00 total |
$7.50 cash wage, $2.20 credit, $9.70 total |
|
On and After December 31, 2017 |
$8.65 cash wage, $4.35 credit, $13.00 total |
$8.00 cash wage, $4.00 credit, $12.00 total |
$7.50 cash wage, $3.50 credit, $11.00 total |
$7.50 cash wage, $2.90 credit, $10.40 total |
|
On or After December 31, 2018 |
$10.00 cash wage, $5.00 credit, $15.00 total |
$9.00 cash wage, $4.50 credit, $13.50 total |
$8.00 cash wage, $4.00 credit, $12.00 total |
$7.50 cash wage, $3.60 credit, $11.10 total |
|
On or After December 31, 2019 |
|
$10.00 cash wage, $5.00 credit, $15.00 total |
$8.65 cash wage, $4.35 credit, $13.00 total |
$7.85 cash wage, $3.95 credit, $11.80 total |
|
On or After December 31, 2020 |
|
|
$9.35 cash wage, $4.65 credit, $14.00 total |
$8.35 cash wage, $4.15 credit, $12.50 total |
|
On or After December 31, 2021 |
|
|
$10.00 cash wage, $5.00 credit, $15.00 total |
|
B. Uniform Maintenance Pay
The amended orders also alter the amount of pay employees receive for uniform maintenance, which is required if a New York employer does not maintain required uniforms for its employees. The applicable rates are based on the number of hours worked:
(1) Employees working greater than or equal to 30 hours per week will be paid at the “high” rate.
(2) Employees working more than 20 hours but less than 30 hours per week will be paid at the “medium” rate.
(3) Employees working less than or equal to 20 hours per week will be paid at the “low” rate.
Table 4: Uniform Maintenance Pay
|
|
New York City |
New York City |
Nassau, Suffolk, and Westchester Counties |
Remainder of New York State |
|
On and After December 31, 2016 |
$13.70 high, $10.80 medium, $6.55 low |
$13.05 high, $10.35 medium, $6.25 low |
$12.45 high, $9.85 medium, $5.95 low |
$12.05 high, $9.55 medium, $5.75 low |
|
On and After December 31, 2017 |
$16.20 high, $12.80 medium, $7.75 low |
$14.95 high, $11.80 medium, $7.15 low |
$13.70 high, $10.80 medium, $6.55 low |
$12.95 high, $10.25 medium, $6.20 low |
|
On or After December 31, 2018 |
$18.65 high, $14.75 medium, $8.90 low |
$16.80 high, $13.30 medium, $8.05 low |
$14.95 high, $11.80 medium, $7.15 low |
$13.80 high, $10.90 medium, $6.60 low |
|
On or After December 31, 2019 |
|
$18.65 high, $14.75 medium, $8.90 low |
$16.20 high, $12.80 medium, $7.75 low |
$14.70 high, $11.60 medium, $7.00 low |
|
On or After December 31, 2020 |
|
|
$17.40 high, $13.75 medium, $8.30 low |
$15.55 high, $12.30 medium, $7.45 low |
|
On or After December 31, 2021 |
|
|
$18.65 high, $14.75 medium, $8.90 low |
|
FAQ Guidance Regarding Increased Minimum Wage Rates
In addition to adopting the proposed wage orders, the NYSDOL also issued FAQ guidance regarding the implementation of New York’s increased minimum wages.
Table 5: Minimum Wage Rates
|
|
New York City |
New York City |
Nassau, Suffolk, and Westchester Counties |
Remainder of New York State |
|
On and after December 31, 2016 |
$11.00 per hour |
$10.50 per hour |
$10.00 per hour |
$9.70 per hour |
|
On and after December 31, 2017 |
$13.00 per hour |
$12.00 per hour |
$11.00 per hour |
$10.40 per hour |
|
On and after December 31, 2018 |
$15.00 per hour |
$13.50 per hour |
$12.00 per hour |
$11.10 per hour |
|
On and after December 31, 2019 |
$15.00 per hour |
$13.00 per hour |
$11.80 per hour |
|
|
On and after December 31, 2020 |
$14.00 per hour |
$12.50 per hour |
||
|
On and after December 31, 2021 |
$15.00 per hour |
Published annually by the Commissioner of Labor on each December 31, totaling no more than $15.00 per hour |
This guidance may assist New York employers in navigating the complex, increased minimum wage rates based on geography and company size that will become effective as of December 31, 2016. Of note, the guidance includes a useful, multi-step “Minimum Wage Lookup” tool. It also provides the following information:
- Employees must be paid the effective minimum wage at the location where they work, not where they live or where the company is headquartered. For example, only employees of a New York City “Large Employer” who work within New York City will need to be paid the “Large Employer” minimum wage rate.
- The FAQ guidance narrowly defines a New York City “Small Employer” as an employer “that (1) employs one or more employees in New York City and (2) has not employed more than 10 employees at any time during the current or prior calendar year and among all worksites.”
- A New York City “Large Employer” is defined as an employer “that (1) employs one or more employees in New York City, and (2) has employed more than 10 employees at any time during the current or prior calendar year and among all worksites.”
- For the purpose of counting the number of employees, the guidance states that employers must broadly include any part-time employees and must calculate the total number of employees at any given time during the current or prior calendar year and among all worksites, not the average number of employees for the year or in any particular quarter.
- If an employee works at multiple job sites, the NYSDOL guidance states that employers may either: (i) pay the higher applicable rate or (ii) pay multiple rates, provided that the employer accurately tracks the number of hours and wages rates paid. In the second scenario, the NYSDOL appears to permit a “blended” regular rate for the purposes of calculating the employee’s overtime rate, which appears to be consistent with U.S. Department of Labor guidance.
