Client Alert
Contact:
Steven B. Harz, Esq., Chairperson
Labor & Employment Law Group
201-342-6000
July 27, 2009

NEW YORK ISSUES NEW WAGE RULES FOR THE RESTAURANT INDUSTRY.

Dear Clients and Friends:

On July 24, 2009, the Federal minimum wage, as well as the minimum wage in the State of New York, increased from $7.15 an hour to $7.25 an hour. To coincide with the minimum wage increase, the New York State Department of Labor (the “DOL”) published new allowance rates for the restaurant industry. These new rates, which the DOL advises will soon be codified in the New York Administrative Code, are considered official DOL policy and must be adhered to by restaurant employers in New York effective immediately. The following is a brief guide to the new rates:

Tip Allowance

The tip allowance applies to “food service workers” and other employees who receive tips. A “food service worker” is an employee who is primarily engaged in serving food and beverages to customers. Wait staff, bartenders, captains, and busing personnel are generally considered food service workers. The maximum tip allowance for a food service worker is $2.60 per hour.

An employee such as a delivery person, who receives tips but is not a food service worker, is treated differently. If the average tips received by a delivery person are between $1.60 and $2.35 per hour, then the maximum tip allowance is $1.60 per hour.  If the average tips per hour exceed $2.35, then the maximum tip allowance is $2.35 per hour.

Meal Allowance

For a food service worker receiving a cash wage (meaning, the part of the worker’s hourly pay that does not consist of tips) of at least $4.65 per hour, the meal allowance is $2.10 per meal.

For all other employees, the meal allowance is $2.50 per meal.

Lodging Allowance

The lodging allowance depends on how long lodging is provided:

For a food service worker receiving a cash wage (meaning, the part of the worker’s hourly pay that does not consist of tips) of at least $4.65 per hour, the lodging allowance is $1.50 per day, or $9.60 per week.

For all other employees, the lodging allowance is $1.75 per day, or $11.30 per week.

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In addition to the above, restaurant employers should also note two other changes that have occurred in New York as of July 24, 2009:

First, the Uniform Maintenance Rate has changed. Where an employer that requires its employees to wear uniforms does not launder or maintain its employees’ uniforms, the employer must pay its employees, in addition to the minimum wage:

- $9.00 per week if an employee works over 30 hours;
- $7.10 per week if an employee works over 20 hours, but not more than 30 hours;
- $4.30 per week if an employee works 20 hours or less.

Second, employers should be aware that, for an employee to be considered exempt from the minimum wage rules pursuant to the executive or administration exemptions, the employee must be paid a minimum weekly salary of $543.75. The law regarding exemptions can be quite complicated. As such, employers with questions in that area should consult legal counsel.

If you have any questions with regard to the application of the new New York allowance rates to your restaurant business, or with respect to other New York wage and hour regulations or any other labor and employment law matter, please do not hesitate to contact Steven B. Harz, Esq. at (201) 342-6000, (212) 363-1380 or via e-mail at sharz@hertenburstein.com.