Home » 2009 Issues » November 04, 2009 » LAB-44-09-00019-EP Making Adjustments to the Regulations Dealing with the State Minimum Wage as Required by the Increase in the Federal Minimum Wage that Took Effect 7/24/09 and Adjusting Various Wage Allowances in the Same Proportion as this ...
LAB-44-09-00019-EP Making Adjustments to the Regulations Dealing with the State Minimum Wage as Required by the Increase in the Federal Minimum Wage that Took Effect 7/24/09 and Adjusting Various Wage Allowances in the Same Proportion as this ...
11/4/09 N.Y. St. Reg. LAB-44-09-00019-EP
NEW YORK STATE REGISTER
VOLUME XXXI, ISSUE 44
November 04, 2009
RULE MAKING ACTIVITIES
DEPARTMENT OF LABOR
EMERGENCY/PROPOSED RULE MAKING
NO HEARING(S) SCHEDULED
I.D No. LAB-44-09-00019-EP
Filing No. 1220
Filing Date. Oct. 20, 2009
Effective Date. Oct. 20, 2009
Making Adjustments to the Regulations Dealing with the State Minimum Wage as Required by the Increase in the Federal Minimum Wage that Took Effect 7/24/09 and Adjusting Various Wage Allowances in the Same Proportion as this Minimum Wage Increase
PURSUANT TO THE PROVISIONS OF THE State Administrative Procedure Act, NOTICE is hereby given of the following action:
Proposed Action:
Amendment of Parts 137, 138, 141, 142, 143 and 190 of Title 12 NYCRR.
Statutory authority:
Labor Law, art. 19, sections 652(2) and 673(1)
Finding of necessity for emergency rule:
Preservation of general welfare.
Specific reasons underlying the finding of necessity:
The federal minimum wage increased to $7.25 per hour on July 24, 2009. Current State law (Labor Law Section 652(1)) provides that the State minimum wage shall be $7.15 "or, if greater, such other wage as may be established by federal law pursuant to 29 U.S.C. section 206 or its successors." Labor Law Section 652(2) provides that all minimum wage orders shall be modified to increase all monetary amounts therein in the same proportion as the increase in the hourly minimum wage as provided in subdivision one of that section. Therefore, the July 24, 2009 increase in the federal minimum wage mandates both an increase in the State minimum wage and a corresponding modification of the minimum wage orders.
Subject:
Making adjustments to the regulations dealing with the State Minimum Wage as required by the increase in the federal minimum wage that took effect 7/24/09 and adjusting various wage allowances in the same proportion as this minimum wage increase.
Purpose:
To bring the State minimum wage into compliance with the Federal minimum wage, to take effect 7/24/2009.
Substance of emergency/proposed rule (Full text is posted at the following State website:www.labor.state.ny.us):
In compliance with Labor Law Section 652(2), due to the increase in the federal minimum wage to $7.25 per hour, the following modifications are made to existing Wage Orders:
12 NYCRR Part 137 (Minimum Wage Order for the Restaurant Industry)- increase the basic hourly minimum wage to $7.25 (137-1.2) with corresponding increases to tip allowance for service employees (137-1.4(a)), tip allowance for food service workers (137-1.5), uniform allowance (137-1.8), meal and lodging allowances (137-1.9), classification of executive work (137-3.2(c)(1)(i)), classification of administrative work (137-3.2(c)(1)(ii)).
12 NYCRR Part 138 (Minimum Wage Order for the Hotel Industry)- increase the basic hourly minimum wage to $7.25 (138-2.1(a)) with corresponding increases to tip allowance for service employees (138-2.1(b)), tip allowance for food service workers (138-2.1(c)), tip allowance for chambermaids in resort hotels (138-2.1(d)), uniform allowance (138-2.5), meal and lodging allowances (138-2.7), classification of executive work (138-4.4(c)(1)(i)), classification of administrative work (138-4.4(c)(1)(ii)).
12 NYCRR Part 141 (Minimum Wage Order for the Building Service Industry)- increase the basic hourly minimum wage to $7.25 (141-1.3) with corresponding increases to unit rate for janitors in residential buildings (141-1.2), allowances for utilities (141-1.6), uniform allowance (141-1.8), unit rate limitations (141-2.8), classification of executive work (141-3.2(c)(1)(i)), classification of administrative work (137-3.2(c)(1)(ii)).
12 NYCRR Part 142-2 (Minimum Wage Order for Micellaneous Industries except nonprofitmaking institutions)- increase the basic hourly minimum wage to $7.25 (142-2.1) with corresponding increases to meal and lodging allowances (142-2.5)(a)), uniform allowance (142-2.5(c)), classification of executive work (142-2.14(c)(4)(i)), classification of administrative work (142-2.14(c)(4)(ii)).
12 NYCRR Part 142-3 (Minimum Wage Order for nonprofitmaking institutions that have not elected to be exempt from coverage under a minimum wage order)- increase the basic hourly minimum wage to $7.25 (142-3.1) with corresponding increases to meal and lodging allowances (142-3.5)(a)), uniform allowance (142-3.5(c)), classification of executive work (142-3.12(c)(2)(i)), classification of administrative work (142-3.12(c)(2)(ii)).
12 NYCRR Part 143 (Minimum Wage Order for nonprofitmaking institutions that certifies that it will pay the stautory minimum wage in lieu of being covered under a minimum wage order)- increase the basic hourly minimum wage to $7.25 (143.0) with corresponding increases to classification of executive work (143.1(b)(1)), classification of administrative work (142.1(b)(2)).
12 NYCRR Part 190 (Minimum Wage Order for Farm Workers)- revise the definition of "basic minimum hourly wage" (190-1.3(d)), increase the basic hourly minimum wage to $7.25 (190-2.1).
This notice is intended:
to serve as both a notice of emergency adoption and a notice of proposed rule making. The emergency rule will expire January 17, 2010.
Text of rule and any required statements and analyses may be obtained from:
Jeffrey G. Shapiro, Esq., New York State Department of Labor, State Office Campus, Building 12, Room 509, Albany, NY 12240, (518) 457-4380, email: cejjs@labor.state.ny.us
Data, views or arguments may be submitted to:
Same as above.
Public comment will be received until:
45 days after publication of this notice.
This action was not under consideration at the time this agency's regulatory agenda was submitted.
Regulatory Impact Statement
1. Statutory authority: Article 19 Sections 652(2) and 653(2), Article 2 Section 21 (11), and Article 19-A Sections 673(2) and 674(1) of the Labor Law require the Commissioner of Labor to issue regulations modifying wage orders to reflect increases in the minimum wage and related allowances. Article 19 Section 652(2) gives the Commissioner authority to modify the minimum wage orders in proportion to the increase in the minimum wage. Article 19 Section 653(1) gives the Commissioner authority to investigate the adequacy of wages. Article 2 Section 21(11) gives the Commissioner authority to issue such regulations governing any provision of the labor law as she finds necessary and proper. Article 19-A Section 673(2) requires the farm minimum hourly rate to increase whenever the general minimum hourly rate required by Section 652(1) increases. Article 19-A Section 674(1) authorizes the Commissioner to promulgate such regulations as she deems appropriate to carry out this article and to safeguard the minimum wage standards.
2. Legislative objectives: The legislature found it necessary to set a minimum hourly rate and authorized the Commissioner to promulgate regulations setting allowances for gratuities, meals, lodging, apparel and such other items, services and facilities, in order to remediate wages that are insufficient to provide adequate maintenance for employees and their families; to promote the health, efficiency and well-being of employees; to prevent unfair competition against other employers and their employees; to promote stability of industry; to maintain the purchasing power of employees; and to minimize the necessity to supplement wages with public money for relief or other public and private assistance.
The proposed regulations increase the allowances for gratuities, meals, lodging, and uniform maintenance, and the minimum salary for executive and administrative exemption, in proportion to the statutory increase in the hourly minimum wage rate, thus maintaining the existing proportionality among the elements of the wage orders.
3. Needs and benefits: The amendments to the wage orders are needed to conform the regulations to Section 652.2 of the Labor Law, which requires the Commissioner to modify the wage orders to increase all monetary amounts specified therein in the same proportion as the increase in the hourly minimum wage. The modified minimum wage orders are to be promulgated by the Commissioner without a public hearing, and without reference to a wage board, and to become effective on the effective date of an increase in the hourly minimum wage (July 24, 2009). Overall impact of these amendments is small and there is no significant benefit or harm to employees or employers.
4. Costs: These regulations will increase the minimum wage from $7.15 per hour to $7.25 per hour as required by Federal law. As required by 652(2), these regulations will also increase the amounts specified in minimum wage orders as allowances for gratuities, and, when furnished by the employer to the employees, for meals, lodging, uniform maintenance, and minimum salary for executive and administrative exemptions in the same proportion as the increase in the hourly minimum wage, rounded off to the nearest five cents.
5. Local government mandates: None. Federal, state and municipal governments and political subdivisions thereof are excluded from coverage under Parts 137, 138, 141, and 142 by Labor Law Section 651.5 (n) and 651.5 (last paragraph). They are not covered under Part 143 because it covers only certain non-profit organizations, in accordance with Section 652.3 of the Labor Law. They are excluded from coverage under Part 190 by Section 671.2 of the Labor Law.
6. Paperwork: There are no additional paperwork requirements in these amendments.
7. Duplication: None.
8. Alternatives: There are no alternatives, as the Commissioner has no discretion to amend the regulations other than as set forth in these amendments.
9. Federal standards: Generally, Parts 137, 138, 141, 142, 143 and 190 exceed the minimum standards found in the federal Fair Labor Standards Act with respect to minimum wage allowances and salary thresholds for exempt employees. The FLSA's tip allowance provisions after the minimum wage increase on July 24, 2009 will continue to permit employers to pay tipped employees as little as $2.13 per hour. In contrast, New York State's tip allowance provisions, as amended by these regulations, will require employers to pay tipped employees at least $4.35 per hour and in most cases at least $4.65 per hour. The FLSA's meal and lodging allowance provisions will continue to permit employers to claim the fair market value of these items as part of the minimum wages paid to employees. In contrast, New York State's wage orders do not allow fair market value credits and, under these amendments, will continue to set fixed limits on the value of these items as part of the minimum wages paid to employees. The FLSA's salary thresholds for exemption will continue to be far lower than New York State's. The uniform maintenance provisions of New York's existing and amended wage orders will continue to require, in most cases, payments to employees that the FLSA would not require. Wage Boards established these standards many years ago and the Labor Law requires that the wage allowances be modified in proportion to any increase in the hourly minimum wage.
10. Compliance schedule: Regulated entities should be able to achieve immediate compliance with the regulations. The Department of Labor will publicize the rates change, update our website to provide full details, and assist employers as needed.
Regulatory Flexibility Analysis
1. Effect of rule: All small businesses, but no local governments, are potentially affected by the changes in the regulations.
2. Compliance requirements: There are no changes in the reporting or record-keeping requirements. Businesses that employ tipped employees, provide meals or lodging to employees, or require employees to wear and maintain their own uniforms will have to check their payrolls to make sure they pay at least enough to comply with the statutory increase in the hourly minimum wage rate, as adjusted or mitigated by the small changes in the wage order allowances contained in the new regulations. Businesses in general will have to check the salaries of their lowest-paid executive and administrative exempt employees. Some, but not all, will have to make a small increase in these salaries.
3. Professional services: These regulations will not require small businesses to obtain additional professional services.
4. Compliance costs: These regulations will increase the minimum wage from $7.15 per hour to $7.25 per hour as required by Federal law. As required by Labor Law Section 652(2), these regulations will also increase the amounts specified in minimum wage orders as allowances for gratuities, and, when furnished by the employer to the employees, for meals, lodging, uniform maintenance, and minimum salary for executive and administrative exemptions in the same proportion as the increase in the hourly minimum wage, rounded off to the nearest five cents.
5. Economic and technological feasibility: Compliance with these regulations will be economically and technologically feasible since wage order allowances and special rates have been in existence for a number of years and employers affected by these allowances and rates should already have payroll procedures set up.
6. Minimizing adverse impact: Small businesses may be impacted by the increase in the Federal and State minimum wage. However, these regulations may mitigate the effect of the statutory increase in the minimum hourly rate by increasing the minimum wage allowances that businesses are currently permitted to take. The regulations do not impose any new paperwork or record-keeping requirements.
7. Small business and local government participation: The Business Council of New York, Inc., the New York State Restaurant Association and the New York State Hospitality & Tourism Association were made aware of these new regulations, and directed to the New York State Department of Labor's website, where these regulations are posted. The Department did not receive any comments.
Rural Area Flexibility Analysis
1. Types and estimated numbers of rural areas: These regulations apply to all private employers in all areas of the state.
2. Reporting, recordkeeping and other compliance requirements; and professional services: There are no additional reporting, recordkeeping or compliance requirements for regulated employers and no need for additional professional services.
3. Costs: These regulations will increase the minimum wage from $7.15 per hour to $7.25 per hour as required by Federal law. As required by Labor Law Section 652(2), these regulations will also increase the amounts specified in minimum wage orders as allowances for gratuities, and, when furnished by the employer to the employees, for meals, lodging, uniform maintenance, and minimum salary for executive and administrative exemptions in the same proportion as the increase in the hourly minimum wage, rounded off to the nearest five cents.
4. Minimizing adverse impact: Small businesses may be impacted by the increase in the Federal and State minimum wage. However, these regulations may mitigate the effect of the statutory increase in the minimum hourly rate by increasing the minimum wage allowances that businesses are currently permitted to take. The regulations do not impose any new paperwork or record-keeping requirements.
5. Rural area participation: The Business Council of New York, Inc., the New York State Restaurant Association and the New York State Hospitality & Tourism Association were made aware of these new regulations, and directed to the New York State Department of Labor's website, where these regulations are posted. The Department did not receive any comments.
Job Impact Statement
1. Nature of impact: These regulations will have no significant impact on jobs and employment opportunities. They conform the Wage Orders to the statutory increase in the New York State minimum hourly wage rate that is required by Labor Law Sections 652 and 673 when the federal minimum hourly wage rate increases to $7.25 per hour effective July 24, 2009.
2. Categories and numbers affected: These regulations will have no significant impact on employed persons or businesses.
3. Regions of adverse impact: There will be no adverse impact on employment opportunities in any region of the state as a result of these regulations.
4. Minimizing adverse impact: There will be no adverse impact on employment opportunities as a result of these regulations.
