Article contributed by Ilan Weiser, Ellenoff Grossman & Schole LLP
The list of laws and regulations hospitality employers must comply with keeps getting longer and more onerous with each passing year.
As a result, New York restaurants and bars are very used to being told what to do, and how to do it, as it concerns their operations. Hospitality employers, however, occasionally lose sight of when, or how frequently, they must comply with certain obligations to their employees and are thus urged to familiarize themselves with the below requirements so as not to risk legal liability that may be easily avoided.
Payment of Wages
How often should employees be paid?
The number of lawsuits alleging frequency of pay violations continues to increase. As a result, New York business are being put on notice of their need to possibly adjust how often they pay their employees, which is an extremely easy issue to correct, but extremely costly liability to face. We reminded all New York-based hospitality establishments that they must pay their employees weekly in the June 2022 issue of Total Food Service, and just last week the New York Post ran a front page article on this legal issue alone.
The applicable section of the New York Labor Law states that businesses must only pay their manual workers (which the Department of Labor interprets as at least 25% of working time engaged in “physical labor”) on a weekly basis. Importantly, business in the hospitality industry (any “restaurant” or “hotel” as defined in the New York Hospitality Wage Order) must generally pay all employees, and not just manual workers, weekly.
Uniform Purchase
How soon should employees be reimbursed?
If your business requires that your employee purchase a uniform, you must reimburse the employee for the full cost of that uniform no later than the next regularly scheduled payroll date. That does not mean, however, that you must pay the employee for the cost of regularly maintaining that uniform. Business operators are urged to read Nija Davis Pedlar’s article from the March 2023 issue of Total Food Service for more detailed guidance on this issue.
Maintain Employment Records
When can records of former or current employees be discarded?
An unfortunate reality is that if your business is faced with a future wage and hour litigation your best defenses will most likely concern the strength of the time and payroll records you have on file for the employee(s) in question. It is the employer’s burden, only, to maintain contemporaneous employment records, including but not limited to daily time and weekly pay records, for six years. I recommend doing so for a minimum of seven years to be safe.
Employers who operate a tip sharing or tip pooling system must also keep certain records for the same six year period, including a daily log of the tips collected by each employee on each shift, whether in cash or by credit card, a list of occupations that the employer deems eligible to receive tips through a tip sharing or tip pool system, the shares of tips that each occupation is scheduled to receive from tip sharing or tip pooling, and the amount in tips that each employee receives from the tip share or tip pool, by date.
Businesses who are in the process of changing service providers whose job it is to store and maintain certain employment records, such as payroll companies or professional employer organizations, should know that those companies will not keep your records forever. Those businesses are urged to consider options such as paying their former providers a fee to store their records electronically, however, that may not be the best strategy if that provider eventually goes out of business. Instead, businesses should consider gathering all your data from the provider you are leaving and ensuring it is stored elsewhere, safely and securely, under your own control.
Fast Food Employers
How far in advance must employees be notified of their weekly schedule?
Those businesses considered fast food employers under applicable law with workers in New York City have unique obligations with respect to their employment practices. Specifically, fast food employers must provide an employee with a regular schedule that includes the number of hours the employee will work per week, the expected number of days per week, the times and location of the work, and the date the regular schedule will take effect, at least 14 days before the first day of that regular work schedule.
Schedules must cover at least 7 calendar days, and include the dates, times and locations of shifts. Schedules must be updated within 24 hours, or as soon as practicable, from the time an employer knows of a change, be provided to the affected employee and posted in the workplace. Penalties for non-compliance may result in increased pay for the employees, and depend in-part on when the employees was advised of the change in schedule, e.g. less than 24 hours’ notice vs. less than seven days’ notice vs. less than 14 days’ notice.
Ilan Weiser is a Partner in the Labor & Employment practice group at Ellenoff Grossman & Schole LLP in New York City. Mr. Weiser exclusively represents businesses of all sizes and sectors on how best to comply with the federal, state and local labor laws that govern their operations. Mr. Weiser’s principal area of expertise is employment law litigation and has vigorously defended hundreds of his clients in federal and state court and before various governmental agencies against claims of employment discrimination and unfair pay practices. Mr. Weiser has particularly in-depth knowledge of wage and hour law and regularly defends and counsels his clients in class and collective lawsuits concerning claims for unpaid wages. Ilan Weiser can be reached via email at iweiser@egsllp.com or by phone at 212-370-1300.
