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On September 10, the New York Acting Commissioner Mario J. Musolino approved the Fast Food Wage Board’s recommendation for a $15 per hour minimum wage for fast food industry workers.  The minimum wage for fast food workers will rise in accordance with the schedule established by the Wage Board.  As a result, fast food workers in New York City will earn $15 per hour by the end of 2018.  Fast food workers in the rest of the state will earn $15 starting July 1, 2021.  Some hoped this would be reversed but the law remains intact and going strong.

Which restaurants are included is decided by the definition in the Wage Board’s report.  To be included, the restaurant must be part of a chain that includes at least thirty such restaurants nationally, whether as part of a single “integrated enterprise” which operates thirty stores or as a franchisee where at least thirty stores are affiliated with the franchise nationally.  In other words, if one single restaurant is owned by a single owner, but is part of a brand which has at least thirty stores nationally, that one store is covered.  On the other hand, if one owner has at least 30 fast food stores nationally, the New York ones will be covered by this law as well.

This law will have a far-reaching effect on the fast food industry in New York.  Because of how “fast food establishment” is defined, small, family-owned restaurants which happen to belong to a larger franchise will be affected.  For such small businesses, the increase in costs will be dramatic and will put them at a severe cost disadvantage compared to a non-coverd restaurant next store.  This could force some of them out of business, actually harming the job prospects of fast food workers.  We will continue to monitor developments.

Brody and Associates regularly advises management on complying with state and federal employment laws including wage and hour laws.  If we can be of assistance in this area, please contact us at info@brodyandassociates.com or 203.454.0560.