Labor & Employment Law

New York Proposed Wage Order Illustrates Need for Employer Attention

By Mark Tabakman

In a recent posting in the Wage Hour Blog, Amy Traub has commented on a proposal in New York that would merge the Restaurant and Hotel Wage Order.  If the New York State DOL adopts the merger, this will affect requirements related to the minimum wage, tip credits and tip pooling, customer service charges, overtime calculations and other common issues affecting these related industries.

Significantly, the proposal would prohibit employers from paying non-exempt employees on a salary basis and would mandate hourly payment for all such employees.  This, by itself, is a major shift in the law as the law (state and federal) stands right now, non-exempt employees may be paid on any basis (hourly, salary, piece-rate, etc) provided they are paid overtime properly.  Currently, for salaried employees, this means paying overtime at the half-time rate allowed by the fluctuating work week formula.

This proposal to merge/change the Wage Order highlights the importance of Wage Orders and the absolute necessity for employers to first scrutinize Wage Orders for their particular industry.  Wage Orders cover specific industries and are the "bible" for that industry for wage hour issues.  After the Wage Order, the more generalized state wage hour laws apply, as well as the federal law.   These Wage Orders often have very arcane, unique and industry-specific provisions that can pose trouble for the unwary employer.

Therefore, start by knowing if Wage Orders apply to your industry.  If they do, study them carefully and apply every aspect of them.  Failure to do so will expose the employer to possibly significant liability and the defense that "I didn't know" will not be met with a sympathetic ear by a Department of Labor or a court.   

Full post as published by Wage & Hour - Development & Highlights on November 07, 2010 (boomark / email).