WHAT YOU NEED TO KNOW ABOUT MINIMUM WAGE INCREASES
By Robert G. Brody and Lindsay M. Rinehart
As part of the 2016-17 State Budget, New York State Governor Andrew Cuomo signed legislation enacting a statewide $15 minimum wage plan that will increase earnings of an estimated 2.1 million New Yorkers, in all industries across the state. Increases began at the end of 2016, with New York City seeing the fastest rate of increase. Increases were supposedly calibrated to provide businesses time to adjust. Few employers are satisfied with the timing.
Do you know what the minimum wage order means for your business?
Different Wage Orders for Different Industries
The applicable minimum wage rate depends on a number of factors – one of which being your industry. New York State provides different wage orders for the Hospitality Industry (which includes fast-food and hotel workers); Business Service Industry; Farm Workers; Non-Profit Making Institutions; and, as a “catch-all,” Miscellaneous Industries and Occupations. For purposes of this article, we will focus on the Miscellaneous Industries and Occupations Wage Order, since it covers the vast majority of industries and is most likely to apply to you. However, if you are involved in any of the other industries that have their own specific wage orders, we urge you to review your unique requirements. Tipped workers also have their own wage schedule.
Different Wage Rates for Different Regions in the State
The basic hourly rate to which employees are entitled varies, not only across industries, but across locations within the state. However, for employers in New York City, there is yet another factor – the number of employees you have. Confused yet? Let’s break it down.
The Wage Order for Miscellaneous Industries and Occupations provides the following schedule of increases:
|Location||as of 12/31/18||as of 12/31/19||as of 12/31/20|
|NYC – Large Employers (11 or more employees)||$15.00||$15.00||$15.00|
|NYC – Small Employers (10 or less employees)||$13.50||$15.00||$15.00|
|Long Island and Westchester||$12.00||$13.00||$14.00|
|Remainder of New York State||$11.10||$11.80||$12.50|
As you can see, large employers in New York City (those with 11 or more employees) “topped” out at $15 an hour late last year. Small employers in the City will reach $15 an hour at the end of 2019 and Long Island and Westchester will get there at the end of 2021. Annual increases for the rest of the state (including in our own Rockland County) will continue for some time until the rate reaches $15. Increases will be published by the Commissioner of Labor and will be based on percentage increases determined by the Director of the Division of Budget, based on economic indices, including the Consumer Price Index.
Each wage order has a posting requirement that mandates every employer post a Notice issued by the Department of Labor (DOL) in their workplace. The Notice includes information about the prevailing wage rate, overtime, call-in pay, spread of hours, and uniform maintenance fees, as well as any credits or allowances that may reduce employees’ pay below minimum wage such as receiving tips or meals and lodging. The Notice must be posted in a conspicuous place (plain view). Required posters for all industries can be found on the NYS DOL webpage here: https://www.labor.ny.gov/workerprotection/laborstandards/workprot/minwage.shtm. In addition to the poster for Miscellaneous Industries, there are specific posters for the Hospitality, Building Services, Farm Workers and Apparel Industries.
Frequently Asked Questions
We know you probably have questions. Some frequently asked questions about minimum wage and their answers are below.
Q. Does a Rockland County employer who employs someone living in Westchester County pay the Westchester rate or the rate for Rockland County (and the rests of the state)?
A. The wage rate is based on the work location of the employee. If your business is in Rockland County, all employees are entitled to the Rockland County rate, regardless of where they live.
Q. For NYC employers, how do you count your employees to determine if you are a large or small employer?
A. The size is based on the highest total number of employees at any given time during the current or prior calendar year and among all worksites. Employees are counted on a person by person basis. Part-time workers equal one employee, as do full-time workers. Additionally, employee count is based on the current and prior calendar years. Therefore, if a “large employer” reduces his workforce to 10 or less employees, he must wait at least a full calendar year before he is considered a “small employer.”
Q. If employees work in two different regions for the same employer (for instance Westchester and Rockland Counties), what rate do they get paid?
A. Employers may pay the employee for all hours worked, regardless of location, at the highest wage rate of the two regions, or pay each hour worked in each region at the specific rate required for that region. If an employee earns wages at more than one rate of pay for the earning period, those rates must appear on the employee’s pay stub.
The end of 2019 will be upon us before we know it, so now is the time to prepare for increased wages for your minimum wage workers. When determining your applicable wage rate, remember to take into account your industry and location – and for NYC employers, don’t forget to consider your size! Lastly, just a reminder that the required minimum wage poster gets updated regularly, so make sure you are using the most recent version. It’s true what they say: the times are a changin’ (and so is minimum wage).
Robert G. Brody is Founder and Managing Member and Lindsay M. Rinehart is an Associate at the law firm Brody and Associates, LLC. email@example.com and firstname.lastname@example.org or phone (203) 454-0560.