New York Department of Labor Issues Proposed “Hospitality Wage Order”

On October 4, the New York Department of Labor issued a proposed new wage order for restaurant and hospitality industry employees which, if enacted, would combine the wage orders for the restaurant and hotel industries into a single new Minimum Wage Order for the Hospitality Industry. Below is a summary of some of the significant elements in the Hospitality Wage Order:

• All employees covered by the Wage Order must be paid hourly rates of pay (i.e., paying on a salary basis is no longer permitted).
• Effective January 1, 2011, a food service worker must receive a wage of at least $5.00 per hour with a permissible tip credit of no greater than $2.25 per hour, provided that the total equal or exceeds $7.25 per hour. (If the Wage Order is effective prior to the end of 2010, a food service worker must receive a wage of at least $4.75 per hour with a permissible tip credit of no greater than $2.50 per hour, provided that the total equal or exceeds $7.25 per hour.)
• Employer may require food service workers to participate in a tip pool and may set the percentage to be distributed to each occupation from the tip pool.
• Employer must provide written notice to an employee of any tip credit taken prior to the start of employment or prior to any change in the hourly rate of pay. This written notice/acknowledgment signed by the employee after a pay rate change must be retained by the employer for six years. 
• “Spread of hours” pay applies to all employees in restaurants and all-year hotels (not just industry employees), without regard to an employee’s rate of pay.
• The unique overtime pay requirement for residential hotel employees for hours worked in excess of 44 hours is eliminated. Under the proposed wage order, overtime is due to all covered employees after 40 hours of work.
• The “wash and wear” exemption applicable under federal law for uniform maintenance pay will apply. 
• Effective January 1, 2011, employers may not value meals more than $2.50 per meal for all workers. (If Wage Order is effective prior to the end of 2010, employers may not value meals more than $2.25 for food service workers and $2.50 per meal for all other workers.)
• Employers must keep and retain for six years records related to tip pooling, tip sharing, charges for gratuities, and charges for services unrelated to gratuities.

Public comments on this proposed Wage Order may be submitted to the Department of Labor until December 4, 2010. Please note that the proposed Wage Order is quite detailed and only a summary of some of the more significant proposed changes is listed above. To view the complete proposed Wage Order please visit the New York Department of Labor website.