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News & Press: Laws & Regulations

Important Information from Roundtable with the Attorney General's Office

Thursday, December 04, 2014  
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The Labor Bureau Chief of the Attorney General’s Office, Terri Gerstein, met with the NYC Chapter Board members of the New York State Restaurant Association to discuss the Attorney General’s enforcement priorities and provide feedback on key labor issues restaurant owners face on a day-to-day basis.



The Association’s board was advised that the Attorney General’s office has broad jurisdiction to enforce multiple wage laws, with a priority on low wage workers in numerous industries including the hospitality industry.

As a result of the meeting, it was clear that the Attorney General’s office operates very strategically in selecting cases; they seek to take innovative and compelling cases that will provide precedent for the future. It is not their goal to commence enforcement actions over simple violations that arise from misunderstandings of the law. While the meeting covered many areas of importance to the Attorney General’s Office, the Association is highlighting the more important areas that restaurants should consider when reviewing labor law/payroll compliance as violations of these practices could lead to an investigation by numerous agencies, including the top law enforcement officer in the State of New York – the Attorney General’s Office.


Overtime Calculation for Tipped Workers and the Tip Credit
The wage order has laid out a simple calculation for you to follow for properly compensating any employee:

Example – Tipped employee regularly paid $8.00 per hour minus a tip credit of $3.00 per hour, for a wage rate of $5.00 per hour, who works 50 hours in a work week.

Regular Rate: $8.00 per hour
Overtime Rate: $8.00 x 1.5 = $12.00 per hour
Wage rate for first 40 hours: $8.00 - $3.00 = $5.00 per hour
Wage rate for 10 overtime hours: $12.00 - $3.00 = $9.00 per hour
Wages for the workweek: $5.00 x 40 hours = $200.00
$9.00 x 10 hours = $90.00
Total = $290.00

As long as you are following this model, you will always be in compliance with calculating overtime. However, please note that the minimum wage will increase to $8.75 on 12/31/14 and $9.00 on 12/31/15. Overtime calculations will have to adjust to reflect these changes.


Expenses and Delivery Workers
All work related expenses regarding delivery bikers/drivers must be paid for by the employer. This includes any and all bike/car maintenance that occurs while on the clock. Some employers have a stock of bike products for simple fixes in order to mitigate maintenance costs for employees.

Uniform Dress and Laundry Procedures
All uniforms must be paid for by the employer including any dry cleaning or repair. This is made easier for you by identifying a uniform standard and easily providing the proper clothing for your employees. Constant care needs to be provided along with replacement if necessary. You will have to provide reimbursement for cleaning unless the uniform falls into the wash and wear exception. Please call the Association’s Labor Hotline providers for specific questions on this issue Felice Ekelman at Jackson Lewis (631.247.4652) or Scott DeLuca at Schrader Israely & DeLuca (716.568.7325).

Tip Pooling and the 80/20 Rule
As outlined in the wage order – only 20% of an hourly tipped employee’s total shift can take place with “non-tipped” work. Non-tipped work is most easily defined as work that involves no contact with the guest (i.e. side work, expediting, cleaning, stocking). To avoid an issue, a tipped employee should perform more than 80% of their work doing “tipped” work which is generally considered direct contact with guests.

When it comes to tip pooling, be conscious of the type of worker that qualifies for the tip pool. MANAGERS DO NOT QUALIFY TO BE IN THE TIP POOL.

Examples of employees who qualify:

  • Wait Staff/Captains
  • Counter Personnel who serve food or beverages to customers
  • Bus Persons
  • Bartenders/Service Bartenders/Barbacks
  • Food Runners (remember – contact with the guest – NO EXPEDITORS)
  • Hosts/Greeters
However, be mindful when placed employees in the tip pool as the law does not focus on titles but on actual work duties. Hence a captain with the authority to hire and fire and who sets schedules will likely be deemed a manager and not allowed to participate in a tip pool.

Retaliation Suits
Simply put, employers cannot retaliate against employees for reporting or complaining about labor law violations. Retaliation can be any unfavorable action against an employee for complaining about labor law violations or reporting them to the authorities.
Retaliation can include:
  • Dismissal from employment
  • Cut in work hours
  • Cut in pay
  • Failure to give customary/promised raise
  • Disciplinary action
  • More intense supervision
  • Demotion or Transfer

Recent changes to the Labor Law have made retaliation cases easier to sustain and with higher penalties.

Off-the-book workers

Regardless of whether or not you employ a worker “off the books,” all of your employees are protected under New York State labor laws. No one is exempt from the wage laws of the State. So please make sure to pay all employees the appropriate wages, calculate overtime properly, and follow all applicable laws for all employees regardless of work status (of course, it goes without saying that you should only employ persons with proper work eligibility).

Weekly Salary Payments Instead of Hourly Wages

This can be a tough one to handle considering the different classifications of employees but you should generally never be using weekly salaries for employees unless they are highly compensated professionals such as your chef. Most employees will not qualify as professional employees under the New York wage laws (including line cooks) so the best practice is to pay most employees an hourly rate of pay.

Notification of Tipped Wage to Employees
All employees should be given written notice of their hourly rate of pay, overtime rate of pay, and whether a tip credit is being taken. The notification of tipped wage and minimum wage should be clearly displayed in an employee break area or locker room. Contact us or visit our website should you need to be directed to the right paperwork to be displayed in your establishment.

Payroll Cards

Payroll Cards are becoming more popular for employees. These cards can benefit employees and employers but some cards are not as good as others. The Attorney General's office is reviewing this area of wage payments and there are ceratin regulations that you may wish to consider. Read the Attorney General's report on Pay Cards >>

The Association will continue to keep you posted on any new information we receive. With any questions, comments, or concerns, contact our office at 800.452.5212 or

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