NYC Minimum Wage – Per Hour – Tipped, Non-Tipped and Fast Food

NYC minimum wage is $15 per hour.  The way the wage is calculated depends on the type of industry one is working in – whether one is considered a fast food worker, a general service worker, or a tipped hospitality worker.

NYC has a higher minimum wage than the rest of New York State. The New York State, however, has a higher minimum wage than the federal minimum wage. When the state’s minimum wage is higher than the federal requirement, the state minimum wage supersedes the federal minimum wage because minimum wage laws always favor the employees.

Fast Food Establishment

A fast food worker for purposes of computing New York’s fast food worker minimum wage is an employee of a fast food establishment. A fast food establishment is a business that is part of a chain of 30 or more locations nationally that serves food, or drinks offering limited service where customers pay before eating without full table service.

As of December 31, 2020, the NYC minimum hourly wage for fast food workers is $15 and $14.50 for the rest of the New York State.

General Non-Tipped Workers

This is the first time in years where employees in New York City working in large and small establishments have the same minimum wage of $15 per hour. Large establishments are businesses with 11 or more employees, while small establishments are businesses with 10 or fewer employees.

In Nassau, Suffolk and Westchester Counties, the minimum wage as of December 31, 2020 is $14, while the rest of New York State is $12.50 per hour.

Tipped Hospitality Worker

Under the tip credit provision or tip credit allowance, an employer may pay an employee less than the minimum wage, for as long as the minimum hourly rate plus tips, combined together, reach at least the minimum wage of $15 per hour. To claim a tip credit/allowance, the employer must have given notice to the employees, at or before hiring, that the employer will apply a tip credit or allowance toward their minimum wage and should prove that the employee actually received such tips.

Under NY Admin. Rules 146-2.14, an eligible employee for tip sharing and tip pooling is one who performs, or assists in performing, a personal service to patrons at a level that is a principal and regular part of their duties and is not merely occasional or incidental. Examples of these eligible occupations are wait staff, counter personnel who serve food or beverages to customers, bus persons, bartenders, service bartenders, barbacks, food runners, captains who provide direct food service to customers, and hosts who great and seat guests.

For both large and small establishments in NYC, a tipped hospitality service worker should get $12.50 and $2.50 in tip credit per hour. In Nassau, Suffolk, and Westchester counties, the hospitality service worker should get $11.65 plus $2.35 in tip credit per hour. For the rest of the New York State, the minimum wage for hospitality service workers is $10.40 per hour and $2.10 in tip credit.

Overtime Pay

Under both federal and New York law, non-exempt employees who work more than 40 hours in a workweek must be paid one-and-a-half times their regular rate of pay for hours worked over 40. The rate of pay for overtime is based on the actual wage, including non-discretionary bonuses, commissions, and shift differentials. The minimum wage sets the floor for the overtime calculation, but the actual rate may be higher if the employee earns more than minimum wage. Misclassifying employees as exempt — particularly under the "executive," "administrative," or "professional" exemptions — is one of the most common wage-hour violations and a frequent source of class action litigation.

Exempt Versus Non-Exempt Classification

The exempt versus non-exempt distinction determines whether an employee is entitled to overtime. Exempt employees must meet both a salary test (currently $1,200 per week in New York City as of 2024, adjusting periodically) and a duties test. The duties test varies by exemption category:

• Executive exemption. The employee's primary duty is management, customarily and regularly directs the work of two or more other employees, and has the authority to hire and fire (or whose suggestions on hiring and firing are given particular weight).
• Administrative exemption. The employee's primary duty is office or non-manual work directly related to the management or general business operations of the employer, and the employee exercises discretion and independent judgment with respect to matters of significance.
• Professional exemption. The employee's primary duty requires advanced knowledge, predominantly intellectual in character, in a field of science or learning, typically acquired by prolonged academic instruction.
• Computer employee exemption. Applies to certain computer professionals earning above a threshold.
• Outside sales exemption. Applies to employees customarily and regularly engaged away from the employer's place of business in making sales.

An employer who misclassifies a non-exempt employee as exempt is liable for unpaid overtime going back as much as six years, plus liquidated damages and attorney fees.

Spread of Hours Pay

New York's "spread of hours" rule, codified at 12 NYCRR Section 142-2.4 and 146-1.6, requires an additional hour of pay at the minimum wage when an employee's workday spans more than 10 hours, regardless of how many hours were actually worked. The "spread" is measured from the start of the workday to the end, including unpaid meal breaks. This provision is frequently overlooked and is a common source of wage claims.

Call-In Pay and Reporting Pay

Under 12 NYCRR Section 142-2.3 and 146-1.5, an employee who reports to work on a scheduled shift is entitled to a minimum amount of pay even if the employer sends them home early or has no work for them. In the hospitality industry, the minimum is generally four hours at minimum wage. In general industries, the minimum is three hours.

Uniform Maintenance Pay

Where the employer requires the employee to wear a uniform, the employer must either launder the uniform (or arrange for laundering at the employer's expense) or pay the employee a weekly uniform maintenance allowance. The amount of the allowance is set by regulation and adjusts with the minimum wage.

Wage Notice and Pay Stub Requirements

New York's Wage Theft Prevention Act (WTPA) requires employers to provide each new employee with a written wage notice at hiring, in English and in the employee's primary language. The notice must include the employee's regular rate of pay, the regular pay day, the employer's legal name and any DBA, the employer's address and phone number, and other specific information. Employers must also provide a detailed pay stub with each paycheck showing hours worked, rates of pay, gross wages, deductions, and net wages. Failure to provide the wage notice carries a penalty of up to $50 per workweek (up to $5,000), and failure to provide a proper pay stub carries a penalty of up to $250 per pay period (up to $5,000).

Tip Credit Compliance

The tip credit allows employers in certain industries to pay tipped employees a cash wage below the full minimum wage, with tips making up the difference. The tip credit is heavily regulated:

• The employer must provide written notice of the tip credit before claiming it.
• The employee's tips plus cash wage must equal at least the full minimum wage in every workweek.
• The tip credit is forfeited if the employer fails to comply with notice requirements, includes ineligible employees in a tip pool, or applies the credit to time spent on non-tipped duties exceeding statutory limits.
• Mandatory service charges are not tips and cannot count toward the tip credit; they belong to the employer unless distributed to staff.

Tip-credit violations are among the most common — and most expensive — wage-hour violations in the hospitality industry. A facility that has been claiming the tip credit improperly can owe years of back wages plus liquidated damages.

Independent Contractor Misclassification

Some employers attempt to avoid wage-hour obligations by classifying workers as independent contractors rather than employees. Misclassification can carry liability under federal Fair Labor Standards Act standards, New York Labor Law, the IRS independent contractor tests, and the New York unemployment insurance "ABC" test (which is harder to satisfy than the federal common-law test). Misclassified workers can pursue claims for unpaid minimum wage, overtime, spread of hours, and other wage-hour violations.

Filing a Wage Claim

An employee who believes they have not been properly paid has several options:

• File a complaint with the New York State Department of Labor, which can investigate, issue an order to comply, and assess back wages plus liquidated damages and penalties.
• File a complaint with the federal Department of Labor, which can pursue federal Fair Labor Standards Act claims.
• File a private lawsuit in New York Supreme Court or federal court, with the right to a jury trial in most cases.
• Join or initiate a collective or class action where multiple employees have similar claims.

The choice depends on the size of the claim, the desired remedies, and the practical considerations of each forum.

Retaliation Is Illegal

New York Labor Law Section 215 prohibits an employer from retaliating against an employee for complaining about wage violations, filing a wage claim, or cooperating with a wage investigation. An employer who fires, demotes, reduces hours, or otherwise penalizes an employee for asserting wage rights can be liable for damages including reinstatement, back pay, front pay, and emotional distress damages. Federal law contains parallel anti-retaliation provisions.

Call Our Office

Should you have any wage-related concerns or issues with your employer, we, at the Law Offices of Albert Goodwin, are here for you. We have offices in New York City, Brooklyn, NY and Queens, NY. You can call us at 212-233-1233 or send us an email at [email protected].