Today’s New York employment law landscape is increasingly dynamic, with a constant stream of new legislation and judicial opinions. To keep our readers current on the latest developments, we will share regular summaries of recent developments affecting Empire State employers. Here’s what happened in February 2015:

Likely Rise in Pre-Tip Minimum Wage for Tipped Workers

Last month, we wrote about a series of recommendations made by a state wage board to the acting Commissioner of Labor regarding New York’s tip credit structure. Chiefly, the wage board advocated in favor of an increase in the pre-tip minimum wage – to $7.50/hour – for all tipped workers in New York state. On February 24 – just weeks after the wage board’s recommendations were submitted for his review – the Commissioner adopted four of the wage board’s five suggestions, all but ensuring that the pre-tip minimum wage will increase at year-end.

The recommendations adopted by the Commissioner include:

  • Eliminating the different pre-tip minimum wages for food service workers and non-food service workers
  • Increasing the pre-tip minimum wage to $7.50/hour effective December 31, 2015 (causing a corresponding reduction in the state’s tip credit, which permits businesses to pay tipped employees less than the minimum wage – provided that the employees earn enough gratuities to cover the difference)
  • Further increasing the pre-tip minimum wage by an additional $1/hour for workers in NYC in the event that state lawmakers enact a separate minimum wage for the city

Notably, the Commissioner rejected the lone employer-friendly recommendation, which would have reduced the tipped minimum wage by $1/hour for tipped workers who make substantially more than the minimum wage as a result of their tips.

De Blasio Convenes Paid Sick Leave Advisory Panel

On February 4, NYC Mayor Bill de Blasio announced the formation of an advisory panel to study the impact of the city’s paid sick leave law on the business community. As readers will undoubtedly recall, the NYC Earned Sick Time Act took effect April 1, 2014, and requires that businesses with five or more employees provide those employees with up to 40 hours of paid sick leave per calendar year. The panel, which is expected to meet twice a year, comprises – among others – Andrew Rigie of the Hospitality Alliance, two City Council members, and the presidents of the five borough chambers of commerce.

Employee Misclassification Remains a Significant Problem According to Task Force

As many Empire State businesses are aware, New York has emerged as a national leader in combatting misclassification of employees as independent contractors. Indeed, one of Governor Andrew Cuomo’s first acts in office was to continue the Joint Enforcement Task Force on Employee Misclassification, a coalition consisting of six state agencies, chaired by the Commissioner of Labor. The main goal of the Task Force is to investigate the practice of worker misclassification, coordinate state agencies to ensure enforcement of state law when employers misclassify workers, and develop legislative proposals and other tools to combat misclassification. According to the Task Force, “[m]isclassification occurs when an employee is incorrectly labeled an independent contractor, or is not reported by the employer in any capacity (i.e. ‘off the books’).”

On February 1, the Task Force issued its annual report to Gov. Cuomo. Perhaps most significant, the report noted that in 2014, the Department of Labor alone “completed over 12,000 employee misclassification audits and investigations, finding over 133,000 misclassified workers and unpaid contributions due of over $40.4 million.” Overall, the Task Force members discovered nearly $316 million in unreported wages. Given the state’s emphasis on fighting misclassification, New York businesses should assess all independent contractor designations and perform a self-audit in order to evaluate areas of potential exposure.

Buffalo E-Cigarette Ban Impacts Employers

On February 3, Buffalo Mayor Byron Brown signed into law a bill prohibiting the use of e cigarettes in any location where smoking tobacco cigarettes is already prohibited. For most employers, this means that employees may not use e-cigarettes in the workplace. Similar legislation took effect in NYC last spring, and a statewide bill is currently under deliberation in Albany.