Effective December 31, 2013, the minimum wage in New York State will increase from $7.25 per hour to $8.00 per hour. The overtime rate of pay for hourly, non-tipped employees earning the minimum wage will increase to $12.00 per hour. Employers should ensure that the updated minimum wage poster is posted conspicuously and that changes to their payroll systems are implemented prior to January 1, 2014. The updated poster and additional information are available on the New York State Department of Labor’s website.

Employers covered by the New York Hospitality Wage Order, which includes food service and hotel service workers, should be especially careful to implement changes to their payroll practices by January 1, 2014. The minimum cash wage payable to tipped employees in the hospitality industry remains unchanged at $5.00 per hour for food service workers (e.g., servers, runners, and bussers) and $5.65 per hour for non-food service workers (e.g., delivery persons and coat checkers). However, as of January 1, 2014, the maximum tip credits will increase to $3.00 per hour for food service workers and $2.35 per hour for non-food service workers. Overtime for hospitality workers is calculated by multiplying the minimum wage by time and one-half minus the tip credit, meaning that, due to these changes in minimum tip credits, the overtime rate of pay will increase. Assuming that hospitality employees are paid at the minimum wage minus the maximum tip credit, the overtime rate of pay for food service workers will be $9.00 per hour, and for non-food service employees, the overtime rate will increase to $9.65 per hour.

Outside of the hospitality industry, the minimum cash wage for tipped workers increases from the current $5.50 per hour. Effective January 1, 2014, non-hospitality employees earning more than $1.95 per hour on average in tips must be paid at least $6.05 per hour, and those earning between $1.20 to $1.95 per hour on average in tips must be paid at least $6.80 per hour.

Finally, employers should note that the minimum weekly earnings for executive or administrative workers who are exempt from overtime regulations must be at least $600 per week, inclusive of board, lodging, and other allowances. Employers also should be aware that the New York State minimum wage will increase yet again to $8.75 per hour on January 1, 2015 and to $9.00 per hour on January 1, 2016.

Note: This article was published in the December 2013 issue of the New York eAuthority.