Federal Minimum Wage Increase Will Impact New York’s Restaurant Industry

July 2009Alerts Hospitality Practice Alert

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Effective Friday July 24, 2009, the federal minimum wage will increase to $7.25/hour. This increase will affect New York State’s minimum wage, which will increase from $7.15/hour to $7.25/hour.

New York State’s Minimum Wage Order for the Restaurant Industry will also be affected. Although the following figures are tentative until the New York State Department of Labor issues new guidelines, employers should make the following adjustments:

Minimum Wage

  • The minimum wage for tipped food service employees (earning at least $2.60/hour in tips) will increase from $4.60/hour to $4.65/hour.
  • The minimum wage for tipped non-food service employees will increase from $4.85/hour to $4.90/hour.

Meal Allowances

  • Meal allowances for tipped employees (earning at least $4.60/hour) will increase from $2.10/meal to $2.15/meal.
  • Meal allowances for all other employees will increase from $2.45/meal to $2.50/meal.

Uniform Maintenance Rate

  • The uniform maintenance rate (per week) will increase to $9 for more than 30 hours worked per week; $7.10 for 20 to 30 hours worked per week; and $4.30 for 20 hours or less worked per week.

Exemption Rate

  • The minimum weekly salary required to qualify for the executive and administrative exemptions will increase from $536.10/week to $543.75/week.

Update On The Wage Board

Additionally, the New York State Department of Labor’s Commissioner has convened a Wage Board to review the restaurant and hotel industries’ wage orders. The Board is currently deliberating and is expected to issue its final report and recommendations by early fall. This will likely lead to additional changes and a combined restaurant and hotel industry wage order in the coming months. We anticipate changes to affect the spread of hours provision, the definition of tip pooling and the uniform laundering requirements. The above-referenced rates and allowances may be affected as well.

Clients with questions and concerns about the effect of the new minimum wage rate on their business should contact Carolyn D. Richmond, co-chair of the Hospitality Practice Group at Fox Rothschild LLP, at 212.878.7983 or [email protected].