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New York State’s Minimum Wage and Tip Credits Will Increase Effective December 31, 2017

Authors: Stephanie L. Aranyos (New York City), Shabri Sharma (New York City)

Published Date: December 5, 2017

As we have previously reported, New York State’s Minimum Wage Orders set forth a schedule that provides for the automatic annual increase of, among other things, the salary basis thresholds for overtime exempt employees, the minimum wage applicable to all New York employers, and the permitted tip credits and uniform maintenance pay for New York hospitality employers. Below is a summary of some of the increases that will take effect on December 31, 2017.

Salary Basis Thresholds for Executive and Administrative Exempt Employees

Salary basis thresholds for executive and administrative exempt employees are set to increase as follows:

Table 1: 2018 Salary Basis Thresholds for Executive and Administrative Exempt Employees

New York City Large Employers (11 or more employees) New York City Small Employers (10 or fewer employees) Nassau, Suffolk, and Westchester Counties Remainder of New York State
$975.00 per week $900.00 per week $825.00 per week $780.00 per week

Minimum Wage Rates

The minimum wage is set to increase for all employees (except janitors in residential buildings) as follows:

Table 2: 2018 Minimum Wage Rates

New York City Large Employers (11 or more employees) New York City Small Employers 10 or fewer employees) Nassau, Suffolk, and Westchester Counties Remainder of New York State
Employees (Other Than Fast-Food Employees) $13.00 per hour $12.00 per hour $11.00 per hour $10.40 per hour
Fast-Food Employees $13.50 per hour $11.75 per hour $11.75 per hour $11.75 per hour

Tip Credits and Uniform Maintenance Pay

A.     Tip Credits for Hospitality Employers

Hospitality employers with service employees and food-service workers (other than fast-food employees, for whom no tip credit is permitted) may take credits against employees’ minimum hourly wages, which are noted below. Covered employees must receive at least the applicable hourly “cash wage” (i.e., not including tips), and tip credits may not exceed the hourly “credit” rate, provided that (1) the weekly average of tips meets the hourly “tip-threshold” rate (if applicable), and (2) the actual total of tips received plus cash wages equals or exceeds the basic applicable minimum hourly wage.

Table 3: Service Employees (Other Than Those at Resort Hotels)

New York City Large Employers (11 or more employees) New York City Small Employers 10 or fewer employees) Nassau, Suffolk, and Westchester Counties Remainder of New York State

Minimum Cash Wage

$10.85 $10.00 $9.15 $8.65

Tip Credit

$2.15 $2.00 $1.85 $1.75

Tip Threshold*

$2.80 $2.60 $2.40 $2.25

*This is an hourly threshold based on the weekly average of tips that must be met before an employer can claim a tip credit against an employee’s minimum wage.

Table 4: Service Employees at Resort Hotels

  New York City Large Employers (11 or more employees) New York City Small Employers 10 or fewer employees) Nassau, Suffolk, and Westchester Counties Remainder of New York State

Minimum Cash Wage

$10.85 $10.00 $9.15 $8.65

Tip Credit

$2.15 $2.00 $1.85 $1.75

Tip Threshold*

$7.30 $6.75 $6.15 $5.85

*This is an hourly threshold based on the weekly average of tips that must be met before an employer can claim a tip credit against an employee’s minimum wage.

Table 5: Food-Service Employees (Other Than Fast-Food Employees)

Minimum Cash Wage

  New York City Large Employers (11 or more employees) New York City Small Employers 10 or fewer employees) Nassau, Suffolk, and Westchester Counties Remainder of New York State
$8.65 $8.00 $7.50 $7.50

Tip Credit

$4.35 $4.00 $3.50 $2.90

Note that unlike employers of service employees, employers employing food-service workers (other than fast-food employees) do not have to meet an hourly tip-threshold rate.

B.     Uniform Maintenance Pay

The following uniform maintenance pay must be provided to employees by New York employers that do not maintain the required uniforms for their employees. The amounts to be paid are based on the number of hours worked.

Table 6: 2018 Uniform Maintenance Pay

  New York City Large Employers (11 or more employees) New York City Small Employers 10 or fewer employees) Nassau, Suffolk, and Westchester Counties Remainder of New York State

High (More than 30 Hours per Week)

$16.20 $14.95 $13.70 $12.95

Medium (More Than 20 Hours, but Less Than 30 Hours per Week)

$12.80 $11.80 $10.80 $10.25

Low (20 Hours per Week or Fewer)

$7.75 $7.15 $6.55 $6.20

New York employers should begin reviewing their payroll practices now to ensure compliance with the upcoming wage increases.

Stephanie L. Aranyos  (New York City)

Stephanie L. Aranyos
Stephanie Aranyos serves as of counsel in the firm’s New York City office. Ms. Aranyos advises and represents employers in a broad spectrum of employment and labor matters involving the Fair Labor Standards Act, Title VII, the Americans with Disabilities Act, the Age Discrimination in Employment Act, the Family and Medical Leave Act, the National Labor Relations Act as well as many other federal and state laws affecting employment and labor. Ms. Aranyos frequently represents employers...

Shabri Sharma  (New York City)

Shabri Sharma
Shabri Sharma is an Associate in the New York City office, where she represents and advises management in all aspects of employment law. Ms. Sharma has experience in advising and counseling employers regarding employment discrimination claims, mandatory arbitration policies, independent contractor audits, terminations, severance agreements, recent legal developments, and other related employment issues. Ms. Sharma also delivers employment training to hundreds of employees. Prior to joining...

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