Minimum Wage Hike Takes Effect December 31st
The first of several annual increases implementing the minimum wage increase approved by the legislature earlier this year will take effect at the end of this month. Not only is the minimum wage increasing, but the allowances, credits and minimum weekly salary for employees to be exempt from the state overtime rule also increase whenever the minimum wage goes up (by the same percentage) so they’re increasing too. This hike in the minimum wage also begins the start of different minimum wages in different parts of the state and in New York City a different wage scale for small and large employers adding to the confusion and burden on business owners.
In an attempt to make it easier for you to figure out what the rates are that apply to your business, we’ve enclosed a compilation of the rates, organized by region, for your reference. We’ve listed the cash wage for tips, the tip credit and the weekly salary for employees to quality for the overtime rule exemption on the wage chart along with a brief explanation of key terms used. We’ve also listed the uniform maintenance allowances and meal credits.
This chart explains the minimum weekly salary required to be exempt from the New York State overtime rule. You may have read that the proposed increase in the federal overtime rule was put on hold by a court order, but the state has its own rule and it automatically increases when the minimum wage increases just like uniform maintenance allowances and food credits. The State Labor Department bases New York’s overtime rule on the minimum wage so the weekly salary level for exempt employees varies based on the minimum wage rate that applies to your business. We’ve begun discussions with other business groups about this and we may pursue a change to the formula for determining it with the Labor Department or Legislature.
You will note the relative modest increases in the cash wage for tipped workers especially as compared to the broader minimum wage increases. This is due to the work we did educating legislators about the actual tips employees receive and aggressively advocating for your businesses. We succeeded in preventing elimination of the cash wage, which some labor advocates were seeking, and in establishing a fixed ratio of the cash wage to the minimum wage in the law to reduce the chances of the Labor Department establishing a wage board to increase or eliminate the cash wage for tipped workers. But be on guard, while there are no signs of a wage board taking this on anytime soon, we’re already hearing that labor advocates inside and outside of the legislature want to try to undo our victory and pursue elimination of the cash wage in the 2017 Legislative Session. We’ll keep you informed of any threats to the cash wage as well as any other developments on the wage front as these battles continue.