Director, Human Resource Services
G. R. Reid Consulting Services, LLC
Read about G.R. Reid Human Resource Management Tools
Wage and Hour Compliance
Minimum WageThe New York State minimum wage is $7.25 per hour as of July 24, 2009 as a result of the increase in the federal wage rate. Employers must be sure to display a Minimum Wage information poster in their establishment. These posters can be found on the New York State Department of Labor Website.
Wage Theft Protection Act
Notice Obligations for New Hires:
Currently, New York Labor Law Section 195(1) mandates that employers inform all new hires in writing of their regular rate of pay, pay day, and overtime rate, if applicable. Employers must obtain a written acknowledgment from the new hire that this information was provided to them in writing. These forms are available on the New York State Department of Labor website.
Upon the Wage Theft Prevention Act’s April 12, 2011, effective date, the written notice must also include additional information, such as the method of payment, (hour, shift, day, week, salary, piece, or commission), as well as whether any allowances will be claimed as part of the minimum wage (tips, meals or lodging). Employers will be required to furnish this information in both English and the employee’s primary language.
Annual Notice Obligations for All Employees:
The new law also requires that employers provide all current employees with an annual notice, reiterating their pay rate and other mandated information and obtain a written acknowledgment that the notice was received before February 1st of each year. Being that the law does not go into effect until April 12th of this year, the first time employers will be asked to do this is prior to February 1st of 2012. The Department of Labor will provide compliant forms available for download on their site as the date nears.
Additional Notice Obligations:
The new law also requires employers to provide a written notice at least seven days before any changes to the information contained in the employee’s most recent notice are implemented, unless the modifications are reflected in the employee’s wage statement. Therefore the easiest way to remain in compliance with this is to ensure the wage statement includes the following information: dates of work covered by the payment, employee name, employer name, address and telephone number, hours worked, rates paid and basis of those wages (hour, day, or week), gross wages, credits/allowances claimed (tips, meals or lodging), deductions, and net wages.
Recordkeeping Requirements:
Remaining consistent with current requirements for payroll records, all required notices, statements, and acknowledgments must be maintained for six years.
Hospitality Industry Wage Order
The New York State Department of Labor has issued the final Hospitality Industry Wage Order applicable to hotels and restaurants. The new Wage Order became effective on January 1st, 2011. This order made substantial changes to the rules governing the payment of wages to employees working in the hospitality industry. Employers were encouraged to be in full compliance by January 1st, 2011. Employers had the ability to delay implementation of this order as long as all retroactive payments were made prior to March 1st, 2011. Payroll records must reflect retroactive payments and employers who choose to take this route are responsible for posting an explanation to employees.
All necessary forms and posters are available on the New York State Department of Labor website.
New York State Construction Industry Fair Play Act
Independent Contractor Status:
Under this law, effective October 25th, 2010 construction industry employers must notify all workers of their classification status as employees or independent contractors. Employers must display a New York State Department of Labor notice about the Act, which will explain to workers their rights and protections. Misclassification of employees is becoming a major area of focus for the Department of Labor. Before a worker can be classified as an independent contractor they must satisfy the following three specific criteria. First the worker must be free from control and direction in performing the job, both under his or her contract and in fact. Also, the service they provide must be performed outside the usual course of business which the service is performed” and lastly the worker has to be customarily engaged in an independently established trade, occupation, profession, or business that is similar to the service at issue. If your organization has employees classified as Independent Contractors that do not meet those standard you should audit their files and reclassify them accordingly.
Off the Clock
As an employer you are required to maintain accurate records of the hours your employees work, including straight time, minimum wage and overtime. It is important to remember that at no time can you force your hourly, non-exempt employees to work or even allow them to work for hours that are not logged and compensated. Employees who are forced or “encouraged” to work off the clock are being shortchanged when their employer does not pay them their due overtime. Federal Law and New York State law do not permit overtime wages violations and an organization can be heavily fined for doing so.
Spread of Hours
Employers who have employees who work split shifts need to be aware of the New York State regulation for “Spread of Hours.” Failure to pay “spread of hours” in the appropriate circumstances can be a costly error for employers. New York’s Labor Law requires the following:
“On each day in which the spread of hours exceeds 10, an employee shall receive one hour’s pay at the basic minimum wage rate before allowances...” This means if a server worked a double, a morning shift from 9:00am to 12:00pm and then an evening shift from 6:00 pm to 9:30pm - that server would be entitled to 7.5 hours of pay that day. That would cover the 6.5 hours for the hours worked, plus 1 hour extra pay because the “spread of hours” exceeded ten hours in that work day. Unfortunately, this extra hour of pay is sometimes overlooked in payroll calculations, and can be a costly violation for employers given that the statute of limitations under New York’s Labor Law is 6 years
Compliance
Recordkeeping is crucial. Be sure to review and modify all Labor Law 195 Notices and monitor the Department of Labor Website for forms endorsed by the DOL. Wage statement should also be reviewed for compliance. Have your organization conduct a wage/hour audit to help protect against common claims. Areas to consider include: Minimum Wage Compliance, Notice Obligations, Misclassified Independent Contractors, Off-the-Clock and Spread of Hours.
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