Relates to the number of hours employees may work in the hospitality industry

1 Co-sponsor

• Jack M. Martins

BILL NUMBER:S5792B

Title of bill

An act to amend the labor law, in relation to the number of hours employees may work in the hospitality industry

Purpose or general idea of bill

To provide clarification regarding overtime exemptions for certain hospitality industry employees who receive compensation based on service charges, mandatory gratuities or similar charges.

Summary of specific provisions

This would add a new section 196-e to the Labor Law.

Justification

This legislation would incorporate into state law an exemption to overtime compensation requirements for certain hospitality industry (hotel and restaurant) workers.

Under the Federal Fair Labor Standards Act (FLSA), employees must receive overtime pay for hours worked in excess of 40 hours in a work week at a rate of at least 1.5 times their regular rate of pay, and this provision is incorporated in New York State Labor regulations (12 NYCRR 146-1.4). However, the FLSA provides an exemption from the obligation to pay overtime to workers if:

(i) they are employed by a retail or service establishment; and

(ii) their regular rate of pay exceeds 1.5 times the applicable minimum hourly wage rate in the work week in which overtime hours are worked; and

(iii) more than half the employee's total earnings in a representative period consist of commissions.

New York State Labor regulations do not provide such an exemption. This legislation would provide for an exemption comparable to the federal exemption in New York State law for hospitality industry workers. This exemption would have no effect on most employees in the hospitality industry who will continue to receive overtime pay as they currently do. Only employees whose regular rate of pay is at least 2 times the statutory minimum wage (i.e., $16.00 per hour in 2014) and who receive at least 50% of their remuneration from service charges, mandatory gratuities or similar charges would be exempt from statutory overtime. These include employees employed in, or performing the work of, the classifications of banquet servers, banquet, captains, banquet bartenders, room service servers, room service captains, room service order takers, and pages. Without application of the exemption, compensation for these employees would be substantially increased, making banquet operations unsustainable for many hotels and restaurants. This would jeopardize the entire banquet industry, adversely affecting not only servers and captains, but cooks, stewards and housepersons, and the rewarding jobs that these team members rely on.

Incorporating an exemption comparable to the federal exemption will ensure equitable compensation for employees receiving compensation in addition to their hourly rate of pay and allow hospitality industry employers to continue banquet operations.

Legislative history

2013 - died in Labor Committee in both Houses.

Fiscal implications

None

Effective date

This act shall take effect immediately, provided, however, that this act shall be deemed to have been in full force and effect with respect to any employee in the hospitality industry who received compensation consistent with section 1 of this Act prior to the effective date of this act.