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January 3, 2014

New York Wage Theft Prevention Act and Changes to the New York Minimum Wage

Wage Theft Prevention Act Reminder

We would like to remind employers of their obligation to inform allNew York employees – including exempt employees – in writing, of certain terms of employment, concentrating largely on employee compensation.  This written notification must be provided to all employees between January 1 and February 1 of each year, regardless of whether they had previously received a notice.  We have previously advised you regarding the Wage Theft Prevention Act (the “WTPA”).  See our Alerts dated December 16, 2010 and March 24, 2011.

The notice must include:

  • the rate(s) of pay and basis thereof, whether paid by the hour, shift, day, week, salary, piece commission, or other;
  • allowances, if any, claimed as part of the minimum wage;
  • the designated pay day;
  • the name of the employer;
  • any “doing business as” names used by the employer;
  • the physical address and mailing address (if different) of the employer; and
  • the telephone number of the employer.

Prior to making any changes to the aforementioned information, an employer is required to provide seven (7) days’ notice unless such information is set forth in the wage statement accompanying the payment of wages.  Furthermore, an employer must notify an employee in writing before it reduces an employee’s wage rate.

Template notices are available on the New York State Department of Labor (“NYDOL”) website at:  The notice must be provided in both English and in the employee’s primary language (if the NYDOL offers a template in that language).

Changes to the New York Minimum Wage

Employers who pay employees at the minimum wage must be sure that the WTPA notice reflects the increase in the New York State minimum wage from $7.25 to $8.00 effective December 31, 2013.  The minimum overtime rate will correspondingly increase, to $12.00.  Employers should also be mindful that the minimum wage will further increase to $8.75effective December 31, 2014, and then again to $9.00 effective December 31, 2015.

While regular minimum wage is increasing, the NYDOL’s recently-promulgated proposed guidance leaves the minimum wage for tipped workers in the hospitality industry unchanged.  An employer in the hospitality industry is allowed to take a “tip credit” and pay an hourly wage less than the full minimum wage rate to food service workers and other service employees.  Currently, employers in the hospitality industry must pay $5.00 per hour for food service workers and $5.65 for other service employees.  We expect the final regulations to mirror the proposed guidance.  However, the minimum hourly rate for tipped employees outside of the hospitality industry will likely increase.

Finally, the minimum weekly salary that may qualify an executive and/or administrative employee as “exempt” under New York Law will increase to $600 per week, effective December 31, 2013.  The minimum weekly salary will then increase to $656.25 per week effective December 31, 2014, and again to $675 per week effective December 31, 2015.

Significance for Employers

Employers must provide notices to all employees between January 1, 2014 and February 1, 2014.  Failure to provide proper notice subjects employers to damages of up to $50 per week, per employee (up to $2,500 per employee in civil lawsuits).  Employers must also be sure to comply with changes to the minimum wage. 

Given the tremendous increase in both individual and class action wage and hour litigation, employers should consider conducting periodic audits of their pay policies and wage and hour compliance.