Article contributed by Gregg Kligman, Ellenoff Grossman & Schole LLP
The minimum wage and various wage credits available to employers in New York are changing as of January 1, 2024.
To start off the new year without incurring additional wage and hour liability, hospitality employers must ensure that they are prepared to enact these increases in a timely fashion.
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Updates to New York Wage and Hour Law for Hospitality Employers
In New York, based upon the state budget enacted in May 2023, the minimum wage, overtime rate and exempt employee salary threshold for executive and administrative employees will increase across the state on January 1, 2024, based upon location 1, as shown below in charts #1 and 2.
For employers in the hospitality industry, the tip credit for food service workers (an employee who is primarily engaged in serving food or beverage to customers, e.g. waitstaff, bartenders, and bussers) and service employees (an employee other than a food service worker who customarily receives tips, e.g. delivery and coat checks) is also changing, resulting in corresponding increases to both the cash minimum wage and cash overtime rate2 as shown below in chart #3.
New York’s meal credits for hospitality employers will be increased as shown below in chart #4.
For those employers required to provide employees with a uniform allowance, the allowance increases to the following in the new year based upon the number of hours worked weekly and location, shown below in chart #5.
Importantly, the increase in the minimum wage also increases spread of hours pay since that rate is equal to one hour at the basic minimum wage for each day in which the interval of time from when an employee starts working to when the employee ends working exceeds 10 hours.
Hospitality employers should also provide employees with updated notices of pay rate and payday in advance of the January 1, 2024 minimum wage increase.
Employers outside of New York, including those in California, Connecticut, New Jersey, and many other states are also subject to minimum wage increases in the new year and should ensure compliance with the relevant changes.
Additional Changes in Employment Law
In addition to these wage and hour issues, hospitality employers must remember to comply with the wage transparency laws that are in effect across New York.
Employers should develop wage ranges for new hires and include those ranges in any advertisements or postings for jobs, promotions, and transfers to ensure compliance with these requirements.
Moreover, employers are required to provide employee with notice of their right to apply for unemployment benefits in increased circumstances in New York as of November 13, 2023.
In addition to providing employees with a Record of Employment upon separation from employment, New York employers must now provide employees with this notice upon a reduction in hours, a temporary suspension and any other interruption of continued employment that results in total or partial unemployment.
Finally, in a small victory for employers, as of January 1, 2024, employers are no longer required to provide their employees with paid leave to obtain the COVID-19 vaccine.
Final Reminder
Don’t forget to audit your paystubs and payroll reports. Even though you may be paying the proper hourly rate, overtime rate, tip credit and cash wages, your payroll provider may calculate and/or list the numbers improperly on the paystub itself, which could result in corresponding legal liability.
They may also omit information required to be on paystubs under New York law, such as the balance of an employee’s available sick and safe leave.
While you rely on your payroll provider for these tasks, ultimately, if there is an error, the liability would likely fall on you as the employer.
1 At the time of publication, apart from the minimum wage, these numbers are merely proposals. However, we anticipate that they will be adopted at some point in December 2023 before they go into effect on January 1, 2024.
2 Cash minimum wage and cash overtime rate refers to the amounts directly paid to an employee after the tip credit is taken from the full minimum wage and overtime rates of pay.
Gregg Kligman is a Partner at Ellenoff Grossman & Schole LLP in New York City and practices in the firm’s Labor and Employment Practice Group.
Mr. Kligman’s practice includes defending clients in federal and state courts, before administrative agencies and in arbitration and mediation in cases alleging discrimination, harassment, retaliation, wage and hour violations, and other employment related claims.
While Mr. Kligman’s representation spans many industries, he has developed a focus representing clients in the hospitality and restaurant industries including multi-venue restaurant groups, fine dining establishments, fast casual restaurants, coffee shops and bars.
Mr. Kligman’s experience with the hospitality and restaurant industries allows him to advise these businesses to ensure compliance with their unique wage and hour regulations. Gregg Kligman can be reached at gkilgman@egsllp.com or via phone at 212-370-1300.
