Minimum Wage Changes to New York’s Fast Food Industry

As we previously discussed in May and July of this year, wage and hour requirements for the fast food industry in New York State are changing starting in the new year. These changes, which go into effect on December 31, 2015, result from recommendations made by the Fast Food Wage Board, which Governor Andrew Cuomo instructed Acting State Labor Commissioner Mario J. Musolino to empanel in May of 2015. The Wage Board announced its recommendations in July, and Acting Commissioner Musolino accepted those recommendations in September of 2015.

The new requirements apply to any employee working for a covered “Fast Food Establishment” if the employee’s job duties included at least one of the following: customer service, cooking, food or drink preparation, delivery, security, stocking supplies or equipment, cleaning, or routine maintenance.

A covered “Fast Food Establishment” is any business that meets the following criteria:

• Primarily serves food or drinks, including coffee shops, juice bars, donut shops, and ice cream parlors; and
• Offers limited service, where customers order and pay before eating, including restaurants with tables but without full table service, and places that only provide take-out service; and
• Is part of a chain of 30 or more locations, including individually-owned establishments associated with a brand that has 30 or more locations nationally.

The higher minimum wage rates for covered employees are as follows:

New York City:

• $10.50 per hour beginning December 31, 2015;
• $12.00 per hour beginning December 31, 2016;
• $13.50 per hour beginning December 31, 2017; and
• $15.00 per hour beginning December 31, 2018.

New York State (excluding New York City):

• $9.75 per hour beginning December 31, 2015;
• $10.75 per hour beginning December 31, 2016;
• $11.75 per hour beginning December 31, 2017;
• $12.75 per hour beginning December 31, 2018;
• $13.75 per hour beginning December 31, 2019;
• $14.50 per hour beginning December 31, 2020; and
• $15.00 per hour beginning July 1, 2021.

The New York State Department of Labor has now published a revised Hospitality Industry Wage Order codifying the new requirements in addition to a page addressing a number of frequently asked questions (FAQs) to assist employers with implementing the new requirements.

There are several points to note from the new wage order and the FAQs, which employers should watch as they implement changes to their policies in an effort to remain in compliance with the law:

• Tip credits are not available for fast food employees. However, we note that a fast food establishment is one where patrons order and pay before eating and which offers limited service. So, if employees were previously receiving a tip credit wage because they were waiting on and regularly receiving tips from customers, it is very possible, if not likely, that the employees will not be considered fast food employees under the new requirements.
• Although fast food workers do not regularly earn tips and an employer cannot take a tip credit for them, fast food employees must be allowed to keep any tips that they do earn.
• With the increase in the minimum wage for fast food employees, employers must be sure to pay the higher rate for spread-of-hours pay and call-in pay, should those apply.
• A “fast food establishment” need only have 30 locations nationally–not 30 locations in New York State–to qualify for coverage.
• The 30 establishments need not be commonly owned and operated to trigger coverage as a “fast food establishment.” The 30 establishments can be operated as a franchise if the franchisor and franchisee own or operate 30 establishments.
• A “chain” is defined as a set of establishments that share a common brand or that are characterized by standardized options for decor, marketing, packaging, products, and services.

(via JDSupra)

NY Board Upholds $15 Minimum Wage for Fast-Food Workers

 

A state oversight board on Wednesday upheld the decision by New York Gov. Andrew Cuomo's administration to gradually raise the hourly minimum wage for many fast-food workers to $15.

The New York Industrial Board of Appeals rejected the National Restaurant Association's arguments that that the wage order was unconstitutional, arbitrary, unsupported by the evidence and focused improperly on fast-food chains with more than 30 locations.

The industrial board, whose members are appointed by the governor, said it's authorized only to determine whether the administration's actions were lawful under New York's labor statutes. A wage board heard testimony earlier this year and recommended the wage increases, which were approved by the state labor commissioner in July.

"We find nothing in the statute to prohibit (the labor commissioner) from issuing a minimum wage order that classifies employees based on the number of locations their employers are affiliated with," the industrial board ruled. The commissioner has authority under the law to investigate the adequacy of wages in any occupation, which can be done "for a subset of a segment of an industry" and requires a record establishing "a factual basis for doing so."

The wage board and commissioner concluded current wages were insufficient to meet workers' cost of living. They also concluded that fast-food chains with 30 or more restaurants nationally are "better equipped to absorb a wage increase due to greater operational and financial resources and brand recognition."

The restaurant association said it is "extremely disappointed" with the ruling and will go to court. "We are committed to helping the restaurant community continue to grow and create jobs across the state and plan to take legal action against this arbitrary mandate which is contrary to law," spokeswoman Christin Fernandez said.

New York's minimum wage will rise to $9 an hour on Dec. 31 for most workers under state law.

About 200,000 fast-food chain employees will see their minimums rise then to $10.50 an hour in New York City and $9.75 elsewhere under the commissioner's order.

Their wages will rise after that in three annual increments to $15 by the end of 2018 in New York City and in six increments to $15 by July 1, 2021 across the rest of the state.

(via ABC News)

New York Raising Minimum Wage to $15 for Fast Food Workers

What began almost three years ago with the labor protest movement in New York City has led to higher wages for workers across the whole country. On Wednesday, the movement came back full circle and now, people in NYC are getting the raise they have been protesting for.

A panel appointed by Gov. Andrew Cuomo announced on Wednesday that wages for fast food restaurant employees be raised to $15 over the next few years; New York City would have a faster rate of wage increase. This $15 wage would represent a raise of over 70 percent  for workers that currently earn the minimum wage of $8.75 per hour.

Advocates for low-wage workers said they felt that this wage increase would cause raises for employees in other industries in New York as well with Gov. Cuomo adding that other states would also follow. He states "When New York acts, the rest of the states follow. We've always been different, always have been first, always have been the most progressive." This decision was celebrated by hundreds of workers and union leaders waiting outside of the office building in Lower Manhattan.

Bill Lipton, state director of the Working Families Party, stated the decision a victory for the "99-percenters" and that that "There clearly a new standard for the minimum wage, and it's actually a living wage for the first time in many, many decades."

Mayor Bill de Blasio fought for a higher minimum wage in New York City to account for the higher cost of living, but neither he nor the City Council has the power to change wages citywide and when lawmakers in Albany scoffed at the idea of raising the minimum wage, it forces Gov. Cuomo to take a different route. He convened a board to look at wages for the fast food industry and listened to the from dozens of fast-food workers, who the labor commissioner Mario Musolino must act on. The board said the first wage increase should come by December 31, raising the minimum wage in New York City to $10.50 and the rest of the state to $9.75. The wage would then increase $1.50 annually for the next three years reaching $15 at the end of 2018. The rest of the state will reach $15 by July 1, 2021.

Advocates against this decision have not been fond of this at all. Melissa Fleischut, director of the New York State Restaurant Associate argues "We continue to say that we think it's unfair that they singled out a single segment of our industry."The association felt however that the impact would be felt much less by chains that are smaller than McDonald's or Burger King, chains such as Golden Krust Caribbean Bakery & Grill.

Other lawmakers and economists predict that the wage increase would ripple out to other industries, such as retail, that also pay low wages. Irene Tung, a policy researcher for the National Employment Law Project, noted "it will likely put pressure on employers in other industries to raise wages in order to compete for workers" and that "it would be very attractive for somebody working at the Gap, making around $9 an hour, to look across the street and see Chipotle paying $2 or $3 or $4 more and decide that they would rather worker at Chipotle." She also noted that this would be the first time in history that a state raised the minimum wage for a specific industry. Already on Wednesday, a couple of retail workers that were at the office where the decision was made, asked what the state would do for them. "We deserve it, too," said Mary Gomes, 51, who works at a Duane Reade drugstore, where she earns $9.20 an hour.

[Via NY Times]

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