As we approach the start of a new year, New York employers should prepare for several wage-related adjustments that will take place on Jan. 1, 2025. Along with an increase to the state’s hourly minimum wage rates, there are scheduled changes to the tip credit, meal credit, uninform allowance and salary exemption thresholds. It is critical that employers plan ahead for these upcoming changes. Employers are encouraged to work with their payroll team/providers to ensure that their rate of pay forms and pay stubs are compliant with the new rates. Failing to make the necessary changes poses a substantial risk of legal liability.
Changes to the Tip Credit for Food Service Workers
The minimum wage and minimum cash wage rate for tipped food service workers will increase on Jan. 1, 2025. As a reminder, a “food service worker” is any employee, other than a delivery employee, who is primarily engaged in the serving of food or beverages to guests, patrons or customers and who regularly receives tips from such guests, patrons or customers. Such employees typically include servers, bartenders, bussers and runners.
The current and new rates are set forth below:
NEW YORK CITY, LONG ISLAND & WESTCHESTER COUNTY
REST OF NEW YORK STATE
Changes to the Tip Credit for Service Employees
The minimum wage and minimum cash wage rate for service employees will increase on Jan. 1, 2025. As a reminder, a “service employee” is any employee, other than a food service worker who customarily receives tips. Service employees may include, but are not limited to, coat-check and bathroom attendants. To take a tip credit against the wages of a service employee, that employee must meet the “tip threshold,” which means that the employee’s average weekly tips must meet the minimum amount set forth below.
Employers that have service employees who are covered under the Miscellaneous Industries and Occupations Wage Order are reminded, however, that since Jan.1, 2021 they cannot take any tip credit against those employees’ wages.
The current and new rates are set forth below:
NEW YORK CITY, LONG ISLAND & WESTCHESTER COUNTY
REST OF NEW YORK STATE
Upcoming Changes to the Meal Credit
Under New York law, employers (other than those covered by Building Service Industry Wage Order) who provide meals to employees may lawfully take a “meal credit” against an employee’s wages for each shift that they furnish a meal to the employee.
Most employers may lawfully take a meal credit against an employee’s wages for each shift that they furnish a meal to the employee, provided, the meal consists of at least one of the types of food from each of the four of the following groups:
- fruits or vegetables
- grains or potatoes
- eggs, meat, fish, poultry, dairy, or legumes
- tea, coffee, milk or juice.
Employers must keep records of the meals they provide to employees and the actual cost of such meals.
Employees of certain nonprofits, as well as those covered by the Building Service Industry Wage Order (such as superintendents of residential buildings), may not have their wages deducted due to any employer-furnished meal.
The amount an applicable employer may take against the wages of employees is as follows:
ALL COUNTIES WITHIN NEW YORK STATE
“Food Service Employees” and “Service Employees” are defined above. “Non-Service Employees” are any nonexempt employees other than a food service worker or service employee, such as a line cook. Meal credits cannot be taken towards the wages of exempt employees.
For Non-Service Employees who work in the rest of New York State and who are covered by Miscellaneous Industries and Occupations Wage Order, the meal credit will increase from $5.20 per meal to $5.35 per meal, effective Jan. 1, 2025. Further, employers with employees covered by the Minimum Wage Order for Farm Workers will not experience a change in the meal credit. They may continue to take a meal credit of $1.70 against an employee’s wages.
Changes to the Uniform Allowance
Under New York law, if an employer requires an employee to wear a uniform, the employer can either launder and maintain the uniform itself, or pay the employee an allowance, also known as “Uniform Maintenance Pay,” on a weekly basis. The amount an employer must pay an employee as Uniform Maintenance Pay depends on the number of hours worked by the employee during the week. A “required uniform” is defined as “clothing required to be worn while working at the request of an employer” that may not be worn as part of an employee’s ordinary wardrobe outside of work. Uniforms may include, but are not limited to, chef’s coats and aprons.
Note that employers with employees covered under the Minimum Wage Order for Farm Workers, as well as certain nonprofits, are not required to pay any uniform maintenance pay.
Employers to which this applies can expect to see the following changes to Uniform Maintenance Pay:
NEW YORK CITY, LONG ISLAND & WESTCHESTER COUNTY
REST OF NEW YORK STATE
Changes to Salary Exempt Threshold
Depending on their job duties, certain employees may be exempt from overtime requirements under the law. This typically includes, but is not limited to, executive, managerial and administrative employees. To be exempt from overtime, under New York law, these employees must also be paid a minimum amount per week, depending on the size and location of the employer.
The salary threshold for employment exempt status will increase, as set forth below:
NEW YORK SALARY EXEMPT THRESHOLDS
Please note, however, an employee’s salary is only one part of determining whether the employee is properly categorized as exempt from overtime requirements. To be exempt an employer must also satisfy a job duties test. In short, an employer cannot categorize an employee as exempt simply based on their weekly salary.
Practical Implications & Next Steps
Employers should consult with a qualified labor and employment attorney to ensure they are prepared for these wage-related adjustments, which will take effect on Jan. 1, 2025. The failure to make the necessary modifications could subject employers to significant legal liability, including potential class and collective actions.
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