Important Minimum Wage and Related Changes

The upcoming increases in New York's minimum wage rates are also leading to a slew of changes to the state's wage orders.

As a reminder, New York's minimum wage will increase from the current rate of $7.25 per hour as follows:

December 31, 2013: $8.00 per hour;
December 31, 2014: $8.75 per hour;
December 31, 2015: $9.00 per hour.

1. Overtime Rate

As a result of the scheduled increases in the minimum wage, the overtime rate (calculated at 1.5 times the minimum wage for hours worked over 40 in a week) for minimum wage employees will increase as follows:

December 31, 2013: $12.00 per hour;
December 31, 2014: $13.13 per hour;
December 31, 2015: $13.50 per hour.

2. Tipped Minimum Wage/Tip Credit

a. Hospitality Industry

Hospitality industry employers will not face an increase in the tipped minimum wage. Hospitality industry workers can still be paid the current cash wage of $5.00 per hour for food service workers (such as servers, runners, bartenders and bussers), and $5.65 per hour for service employees (such as deliverymen and bathroom attendants).

However, the employers' tip credit for eligible employees will increase due to the new minimum wage rates. The tip credit will now be $3.00 per hour for food service workers, and $2.35 per hour for service employees. Additionally, overtime rates will rise to $9.00 per hour for food service workers and $9.65 for service employees.

b. Non Hospitality Industries

Employers outside the hospitality industry will see increases in the tipped minimum wage.

The cash wage for tipped workers outside of the hospitality industry is increasing from the current rate of $5.50 per hour to $6.05 per hour for employees earning more than $1.95 per hour on average in tips, and to $6.80 per hour for employees earning an average of $1.20-$1.95 per hour in tips.

3. Exempt Employees

The minimum weekly salary for exempt executive administrative and professional employees is also increasing from the current rate of $543.75 per week as follows:

December 31, 2013: $600.00 per week;
December 31, 2014: $656.25 per week;
December 31, 2015: $675.00 per week.

Employers must be aware of the coming changes to the wage orders in order to ensure compliance with the New York Labor Law. Moreover, although the burden is on employers to comply with the changes in the law, employees should also be cognizant of their rights under the applicable wage orders.

Darren Rumack is an associate at the Klein Law Group P.C., which represents employees in all areas of employment discrimination and unpaid wages law, workers' compensation, and Social Security Disability. The Klein Law Group P.C. is located at 11 Broadway, Suite 960, New York, NY 10004 and can be reached at 212-344-9022.