NEW YORK'S MINIMUM WAGE
INCREASE, AND WAGE DEDUCTION REGULATIONS, AND PAID SICK TIME
LAW
GENDER EQUITY NOTICE REQUIREMENTS FOR COVERED NEW JERSEY
EMPLOYERS
NEW YORK INCREASES MINIMUM WAGE EFECTIVE DECEMBER 31,
2013
Beginning December 31, 2013, the minimum hourly wage rate for
employees in New York State has increased from $7.25 per hour to
$8.00 per hour. The minimum hourly wage rate will again
increase to $8.75 per hour on December 31, 2014, and to $9.00 per
hour on December 31, 2015.
Moreover, the minimum salary amounts that must be paid to New York
employees who are exempt from New York's overtime requirements
as administrative or executive employees has increased to $600 per
week effective December 31, 2013. Thereafter, the minimum
salary will increase to $656.25 on December 31, 2014, and to $675
on December 31, 2015.
Employers should be aware that the New York State minimum wage now
exceeds the federal minimum wage. Thus, although an
employee's hourly wages may comply with federal law, such wages
may not comply with New York law.
Similarly, an employee paid a salary between the federal minimum of
$455 per week and the New York minimum of $600 per week may qualify
as "exempt" from overtime under federal law, yet may not
qualify for the same exemption under New York law. In such
circumstances, the employee is entitled to overtime and must be
paid at a rate of at least one and one-half times the minimum
hourly rate of $8.00 per hour for any hours worked in excess of 40
per week.
What This Means To You
Employers should review the compensation paid to their
employees in New York to ensure compliance with the new minimum
wage and salary obligations and should take the following
steps:
- Confirm the necessary payroll adjustments have been made and they are in compliance with the new minimum wage laws;
- Update their minimum wage posters at the workplace and;
- Ensure that their employees who are classified as "exempt" under the administrative or executive exemptions are being paid a salary of at least $600 per week in order to avoid violation of New York State's overtime laws.
NEW YORK CITY'S PAID SICK TIME LAW GOES INTO EFFECT APRIL 1, 2014
New York City's Earned Sick Time Act ("the Act")
will go into effect for certain employers on April 1, 2014. The Act
requires nearly all private-sector employers to provide all
full-time and part-time employees who work for more than 80 hours
in a calendar year up to 5 paid sick leave days per year. The
Act only applies to employees who are hired to work in New York
City.
Employers that employ 20 or more employees must comply with the Act
by April 1, 2014, and employers employing 15-19 employers must
comply by October 1, 2015.
Employers subject to the Act must provide a minimum of 1 hour of
paid sick time for every 30 hours worked by an employee, however,
employers are not required to provide more than 40 hours of paid
sick leave per year.
As for employers who do not employ the requisite number of
employees, and thus are not required to provide paid sick
leave, these employers must still provide employees with up to 40
hours of unpaid sick leave.
The Act does not require an employer to provide additional paid
sick leave to employees if it already provides other paid time off,
such as personal days or paid vacation, that is equivalent to the
paid sick leave required by the Act.
Employers must provide an employee, at the commencement of
employment, with written notice of the employee's right to sick
time, as well as other aspects pertaining to accrual and the right
to be free from retaliation. The notice must be in English and in
the primary language of the employee, if available. The notice may
also be posted in an area accessible to employees.
For a more detailed discussion of the Act, click here.
NEW YORK DOL ISSUES FINAL WAGE DEDUCTION REGULATIONS
––A ROAD MAP FOR EMPLOYERS SEEKING TO MAKE LAWFUL WAGE
DEDUCTIONS
The New York State Department of Labor ("DOL")
has issued final regulations, effective October 9, 2013, concerning
wage deductions (the "Regulations"). The
Regulations explain how employers may make lawful deductions from
employee wages and address the mandatory requirements for
recovering overpayments due to mathematical or clerical errors and
for repayment of salary advances.
Deduction for the Benefit of Employees
New York Labor Law Section 193(b) permits deductions from employee
wages which are "expressly authorized in writing by the
employee" and "are for the benefit of the
employee."
The statute enumerates the permissible deductions which are "for the benefit of the employee," and also allows for "similar payments for the benefit of the employee." The new Regulations clarify the meaning of "similar payments" explaining that, generally, these are deductions which provide financial or other support for the employee, the employee's family, or a charitable organization. Such support must fall within one of the following enumerated categories:
- Health and welfare benefits;
- Pension and savings;
- Charitable contributions;
- Dues or assessments to a labor organization;
- Transportation; and
- Food and lodging.
Permitted deductions in these categories include fitness and
health club membership dues, day care expenses, pharmacy purchases
made at the employer's business, purchases of food at employee
cafeterias or vending machines, and discounted passes or other
items that allow employees to use mass transit.
In addition, the Regulations explain that "convenience of the
employee," does not mean the deduction offers a
"benefit" to the employee. Accordingly,
check-cashing fees, for example, would be an unlawful wage
deduction. The Regulations also set forth the several
deductions which are specifically prohibited under
Section 193(1)(b):
- Repayment of loan advances and overpayments that are not in accordance with the Regulations;
- Employee purchases of tools, equipment and attire required for work;
- Recoupment of unauthorized expenses;
- Repayment of employer losses, including for spoilage and breakage, cash shortages and fines or penalties incurred by the employer through the conduct of the employee;
- Fines or penalties for tardiness, excessive leave, misconduct or quitting without notice;
- Contributions to political action committees, campaigns and similar payments; and
- Fees, interest or the employer's administrative costs.
Deductions Must be Authorized by Employee
The Regulations also clarify what would be considered
sufficient "authorization" from an employee under Section
193 (1)(b). Wage deductions can be authorized by a collective
bargaining agreement or by a written agreement with the employee
that is express, voluntary, and "informed." To be
considered "informed," the employee must receive advance
written notice of all of the terms and conditions of the deduction,
its benefit, and the details of the manner in which the deduction
shall be made. Further, employees must receive a new notice
whenever the amount of the deduction changes or there is a
substantial change in the benefits of a deduction. However,
where the nature of a deduction may fluctuate based upon a
purchase, such as meals in the company cafeteria, the notice can
list a monetary range of the lowest and highest amount that can be
deducted.
Recovery of Overpayments
While an employer is permitted to make a wage deduction
for an overpayment that is due to a "mathematical or other
clerical error," restrictive procedures with respect to the
timing, frequency, method, permitted amount of recovery and notice
must be followed:
- An employer may recover overpayments made within eight (8) weeks prior to issuing the required "notice of intent" to recoup an overpayment.
- Where the entire overpayment is less than or equal to the net wages in the next wage payment, the entire amount of the overpayment may be recouped in the next wage payment; otherwise, deductions for overpayments are limited to 12.5% of the gross wages (provided the deduction does not reduce wages below the statutory minimum wage rate).
- Notice of intent to make a wage deduction must be given at least (3) three days prior to the deduction if the entire deduction will be taken in single wage payment, or (3) three weeks prior to the commencement of deductions that will be taken periodically.
The Regulations also require employers to adopt procedures for employees to dispute the overpayment and the terms of recovery or to seek to delay the recovery of the overpayment.
Deductions For Wage Advancements
The Regulations define an "advance" as the provision of
money by the employer to the employee based on the
"anticipation of the earning of future wages." Any
provision of money by an employer that is accompanied by interest,
a fee, or some amount consisting of anything other than the amount
provided to the employee, would not constitute an
"advance" for which a permitted wage deduction can be
made.
There are detailed requirements and procedures governing repayment
of an advance:
- The employer and employee must agree, in writing, to the timing, duration, frequency, and method of recovery before the advance is given. The agreement may allow the employer to take a total reclamation of the advance through a deduction made from the last wage payment at the employee's termination.
- Once an advance is given, "no further advance may be given or deducted until any existing advance has been repaid in full."
As with wage overpayments, the employer must implement a
procedure whereby the employee can dispute the amount of the
advance and frequency of deductions if he/she believes they are not
in accordance with the parties' written agreement.
What This Means To You
The Regulations provide critical guidance concerning permissible
deductions of employee wages and set forth mandatory requirements
and procedures concerning recovery of overpayments and repayment of
salary advances. In light of the above, employers should take
the following steps:
- Review and update, as needed, existing wage deduction authorization forms to ensure they meet the new standards set forth in the Regulations;
- Draft notice of intent forms that conform to the requirements set forth in the Regulations;
- Prepare written agreements governing advances in accordance with the Regulations;"Institute internal dispute resolution procedures for employees to contest deductions for wage overpayments and advances in compliance with the Regulations;
- Review policies and practices that are currently in place which may address these issues to ensure they are updated; and
- Train managers and human resources staff so that they can comply with the Regulations and adhere to the record keeping requirements.
GENDER EQUITY NOTICE REQUIREMENTS FOR NEW JERSEY EMPLOYERS GO INTO EFFECT JANUARY 6, 2014
Beginning January 6, 2014, New Jersey employers with at least 50
or more employees including those employees which work outside of
New Jersey must conspicuously post and distribute a gender equity
notice ("Notice") to all employees.
The Notice, which was published by the New Jersey Department of
Labor and Workforce Development ("NJDOL") last month,
implements a 2012 amendment to the New Jersey Equal Pay Act and
informs employees that employers may not discriminate against
employees with respect to their pay, compensation, benefits, or
terms, conditions or privileges of employment because of their sex.
The Notice advises employees of their rights under federal and
state laws and provides contact information for state and federal
agencies.
A copy of the Notice with the precise language required by the
NJDOL can be found
here.
Compliance with the New Notice Requirement
Covered employers must comply with the following new
Notice and distribution requirements:
- Conspicuously Post the Notice by January 6, 2014:
Covered employers must conspicuously post the Notice in a place accessible to all employees in all of the employer's workplaces by January 6, 2014. The employer may post the Notice on its intranet or internet site, so long as the site is exclusively for employees and all employees have access to the site. - Written Notice to Existing Employees on or before February
5, 2014:
Covered Employers are required to provide each employee with a written copy of the Notice upon first request. Covered employers must also provide a written copy of the Notice to all existing employees on or before February 5, 2014. - Written Notice to New Employees Hired after January 6,
2014:
Covered employers must provide a written copy of the Notice to each employee who is hired after January 6, 2014 at the time of his or her hire. - Redistribute the Notice to all Employees Annually:
Covered employers must provide employees with a written copy of the Notice annually, on or before December 31st of each calendar year. - Employees Must Acknowledge Receipt of the Notice:
Covered employers must require employees to sign acknowledgment forms verifying that they have received the Notice and have read and understand its terms and return the signed acknowledgment form within 30 days of receipt. Electronic signatures are sufficient.
Employers may distribute the Notice through email, printed
material, or through the employer's internet site or intranet
site, provided that the site is exclusively for its employees and
that all employees have access to it.
In addition, employers must post and provide the Notice in English
and Spanish, and any other language that the employer reasonably
believes is the first language of a significant number of the
employer's workforce, provided that the NJDOL has issued a form
of the Notice in that language.
What This Means To You
New Jersey covered employers should take the following steps to
comply with the posting and distribution requirements regarding the
Notice:
- Post the Notice in each of their locations in an area that is accessible to all employees;
- Prepare the Notice and accompanying acknowledgment forms for distribution to all employees;
- Include the Notice and accompanying acknowledgment form to new hire paperwork for all employees hired after January 6, 2014; and
- Put a procedure in place to meet the annual Notice requirements.
Special thanks to Daniella M. Muller, an associate in the Employment Practice Group, for her assistance preparing this alert.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.