Effective January 1, 2011, New York State enacted the Hospitality Wage Order (“Order”) which applies to New York’s hospitality industry and makes several important changes to the existing law. 12 N.Y.C.R.R. §146-1.1 et seq.

First, the Order increases the minimum hourly wage for tipped employees such as food service workers, service employees in all establishments, service employees in resort hotels and chambermaids in resort hotels.  That hourly wage is now $5.00 for food service workers and $5.65 for all other service employees.

Second, hourly rates are now required for all non-exempt employees (employees that are paid by the hour under the Fair Labor Standards Act), except commissioned salespersons.  Employers may no longer pay such employees salaries, weekly rates or daily rates.  This is intended to deter excessively long hours and ensure compliance with the rules regarding overtime pay.

Third, overtime pay for all non-exempt employees is now due after 40 hours worked in a week, rather than after 44 hours.

Fourth, for the first time, gratuities are now subject to regulation in New York State.  Employers must give employees written notice of the employer’s tip policies.  Employers must also remit to their service employees all house-imposed guest charges that are said to be gratuities.  If any charges for banquet or special function services are not intended to be gratuities, that information must be clearly communicated to patrons so they are aware that gratuities will not be paid out of those charges.  In a dispute, the employer has the burden of proving by clear and convincing evidence that patrons were notified that the charges were not gratuities.  Adequate notification includes a statement in the contract with the patron that clarifies that the charges are not gratuities.

Fifth, employers must permit employees to bring their own meals or give them a meal at no more than the current meal credit amount, which is $2.50.

Finally, uniform maintenance pay is due all non-exempt employees unless the uniforms are of the “wash and wear” variety.  The employer may establish that the uniforms are “wash and wear” by demonstrating that the number of uniforms provided is the same as the number of days worked per week by the employee and that the uniform is suitable for laundering with personal clothing.

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© 2011 Nissenbaum Law Group, LLC

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