Articles Posted in Compensation, Wages and Overtime

The first of three increases to the New York State minimum wage will take effect on December 31, 2013.  The minimum wage will increase to $8.00 per hour on December 31, 2013; $8.75 per hour on December 31, 2014; and $9.00 per hour on December 31, 2015.   Currently, the minimum wage under the federal Fair Labor Standards Act (“FLSA”) is $7.25 per hour.  Employers in New York, however, will be required to pay more than the federal minimum wage in order to comply with New York law and the FLSA.  The United States Department of Labor provides a helpful map setting forth the minimum wage in all states and jurisdictions.

In addition, effective December 31, 2013, employers will be required to pay executive and administrative employees at least $600 per week, in order for such employees to still be deemed exempt from New York’s overtime pay requirements.  Thereafter, the salary to be paid will need to increase to $656.25 on December 31, 2014, and to $675 on December 31, 2015.

You can contact Gangemi P.C. for additional information or guidance concerning these and other changes to federal and New York State overtime and minimum wage requirements.

In 2012, the New York State legislature amended section 193 of the New York Labor Law, which governs unlawful deductions from pay. One year later, the New York State Department of Labor has issued guidance on the revised unlawful wage deduction statute by issuing  final regulations clarifying the scope of permissible wage deductions.

Under the final regulations, an employer is only permitted to take deductions to recover wage advances, overpayments, for the benefit of the employee, or as otherwise permitted under law. The regulations impose limitations and strict requirements for taking such deductions, which, among other things, must be authorized in writing by the employee.

Section 193 of the New York Labor Law is intended to prevent employers from engaging in “self-help” measures to recover what are essentially costs of doing business.

Earlier this year, Governor Andrew Cuomo signed legislation increasing the New York State minimum wage in three stages. Currently, the New York and federal minimum wage rate is $7.25 per hour. The legislation was included in the new budget, and provides that the minimum wage rate will increase to $8.00 on December 31, 2013; to $8.75 on December 31, 2014; and to $9.00 on December 31, 2015.
Excluded from the increase is the minimum wage currently paid to food service and other tipped employees. It appears, however, that minimum wage increases to these employees will be implemented in the future.
As a result of the New York minimum wage increases, as of December 31, 2013, New York’s minimum wage rate will be higher than that under the federal Fair Labor Standards Act (FLSA). New York employers will be required to comply with the higher minimum wage rate.

The U.S. House of Representatives has taken a major step toward a significant amendment to the 75 year old Fair Labor Standards Act (FLSA). On May 8, 2013, the U.S. House of Representatives passed the “Working Families Flexibility Act of 2013” (H.R. 1406). The bill, which is now in the Senate, proposes that employers be permitted to provide compensatory time instead of overtime pay of 1-1/2 times an employee’s regular hourly rate for hours worked in excess of 40 in a workweek.
Employers would be permitted to provide compensatory time only if authorized by a collective bargaining agreement, or, for nonunion employees, if the employer and employee enter into a clear written agreement providing for compensatory time. An employee could not be forced to enter into such an agreement. The bill contains other requirements and limitations. Nevertheless, the bill provides employees with an option other than receiving overtime pay for hours worked in excess of 40.
The bill is backed by business groups, while other groups see it as an attack on workers’ rights. Much of the objection stems from the fact that the bill does not permit an employee to unilaterally decide when to take any compensatory time off. At the same time, employers would still be able to mandate that the employee work extra hours, without having to pay overtime.

Earlier this month, on March 5, 2013, a bill was introduced to increase the federal minimum wage from the current hourly rate of $7.25 to $10.10. According to the proposed Fair Minimum Wage Act of 2013 (S.460, H.R. 1010), the minimum wage would increase by .95 each year for three years. Thereafter, the minimum wage would increase automatically as a result of cost of living factors. A hearing on the bill will be held on March 13, 2013 before the Senate Committee on Health Education, Labor and Pensions.

On March 4, 2013, AMC Entertainment Inc. was named a defendant in an overtime lawsuit, alleging violations of the Fair Labor Standards Act (FLSA) and New York Labor Law. The complaint, which was filed in the United States District Court for the Southern District of New York, alleges that AMC failed to provide overtime pay to employees, who worked as ticket sellers, ushers, concession workers and ticket takers, for the period commencing in March 2007 to the present.
According to the overtime complaint, the named plaintiff was not permitted to “punch in” until after she changed into her uniform, and was forced to punch out prior to changing out of her uniform at the end of her shift. The complaint alleges that, as a result of this “time shaving,” her time cards do not accurately reflect the number of hours she was required to work.

Section 196-d of the New York State Labor Law prohibits an employer or his “agent” from participating in a tip pool intended for employees. At issue in Barenboim v. Starbucks Corporation, No. 10-4912-cv, (“Barenboim”), is whether a Starbucks “shift supervisor” is an “agent,” and, thus, not permitted to share in tips with baristas, over whom they exercise limited supervisory functions. At issue in a related case, Winans v. Starbucks Corporation, No. 11-3199-cv, (“Winans”) is whether “assistant store managers,” whom Starbucks does exclude from participation in the tip pool, must be permitted to share in tips pursuant to section 196-d of the New York State Labor Law.

The issue in Barenboim turns on the meaning of the term “agent.” In Winans, the issue is whether New York Labor Law § 196-d, although prohibiting certain classes of employees from participating in a tip pool, mandates that certain employees be included.

Both cases were filed in federal District Court for the Southern District of New York. The lower courts dismissed both cases, and the plaintiffs appealed. The Second Circuit Court of Appeals determined that because the issues were novel under New York State law, it would defer their determination and certify them for resolution to New York’s highest court — the New York State Court of Appeals.

On September 8, 2012, Governor Andrew Cuomo signed legislation amending section 193 of the New York Labor Law, which prohibited all but a narrow category of deductions from employee wages. The amendment expands the scope of permissible deductions, including permitting employers to recover wage overpayments as well as employee loan repayments. In addition, the amendment to the New York Labor Law permits wage deductions for purchases made at certain charitable events; discounted parking and transit costs; gym membership dues; cafeteria, vending machine and pharmacy purchases; tuition and certain school-related expenses; and payments for certain housing provided by non-profit hospitals.
The permitted wage deductions are still for the benefit of the employee, with the exception, perhaps, of those permitting the recovery of wage overpayments and loan repayments.
The amendment to the New York Labor Law takes effect on November 7, 2012.

Section 193 of the New York Labor Law currently permits an employer to make wage deductions only for items that are authorized by law, and items that an employee has authorized and are “for the benefit of the employee.” The scope of permissible deductions is relatively narrow, and is expressly stated in New York Labor § 193.
New York seeks to amend New York Labor Law § 193 to increase the types of deductions employers are permitted to make. Provided that the employee authorizes the deductions in writing, the bill permits deductions for prepaid legal plans, purchases at charitable events, gym memberships, discounted parking or mass transit vouchers, tuition and fees related to certain educational institutions, and certain child expenses.
Additional information concerning the bill can be found in the Governor’s Memorandum.