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New York Minimum Wage Increases on December 31st

Like its neighbors in New Jersey and Connecticut, New York will ring in the new year with a new minimum wage.   Beginning December 31st, minimum wage will increase from $7.25 per hour to $8.00 per hour.  A year later, the minimum wage will increase to $8.75, and the following year, it will increase to $9.00.  Take note these changes are effective on December 31st each year–not January 1st, so employees working on New Year’s Eve must be paid the new rate.

 Another important issue is the new threshold salaries for some exempt positions.  Beginning December 31, employees who are exempt from minimum wage and overtime based on the “administrative” and “executive” exemptions must have a minimum salary of $600 per week.  This threshold increases to $656.25 on December 31, 2014, and $675 one year later.  It is crucial to meet these thresholds.  An employee making $31,000 per year would miss the 2014 threshold by only $200 per year, but if that employee works 60 hours per week, the employer would owe more than $23,000 in back wages per year, plus 100% liquidated damages and attorneys’ fees.  In other words, a $200 mistake could cost more than $50,000 to remedy.

 In addition, to ensure all non-exempt employees are paid the minimum wage, employers must also post the updated minimum wage poster.  If an employee’s wage rate will change, employers must also provide a Wage Theft Prevention Act notice.  (Employers must also provide these notices at hire and before February 1 of each year.)

 Finally, employers must determine whether their practices are indirectly affected by the minimum wage increase.  The specifics vary by industry and subject, but issues to consider are uniform maintenance pay, split shift/spread of hours pay, call-in pay, tip credits, meal credits, and lodging credits.  These issues are addressed in detail in the state’s Minimum Wage Orders, available here. Determining which Minimum Wage Order applies and how to determine when these special pay issues raise very technical questions, so it would be wise to consult with counsel on such issues.

 Brody and Associates regularly advises management on complying with the latest state and federal employment laws.  If we can be of assistance in this area, please contact us at info@brodyandassociates.com or 203.965.0560.