The New York State Department of Labor (NYSDOL) has adopted proposed regulations to align the state’s industry-specific wage requirements with the January 1, 2024, increases in the state minimum wage.

In May 2023, Governor Kathy Hochul signed into law a bill to increase New York’s minimum wage again (to $17.00 an hour by 2026). The first increase (to $16.00 an hour) is effective on January 1, 2024, and subsequent changes will take effect on January 1, 2025, and January 1, 2026.

As many of the industry-specific wage requirements in the New York Wage Orders are based on the minimum wage, NYSDOL has adopted regulations to adjust the New York Wage Orders on various issues, including credits against the minimum wage and the minimum salary threshold for certain overtime exempt employees.

Changes to Home Care Worker Minimum Wage

The minimum wage for home care workers has also been updated, effective January 1, 2024.  The DOL has updated its Home Care Worker Minimum Wage poster, which can be found here

Changes to Minimum Salary Requirements for Overtime Exempt Employees

To be an exempt executive or administrative employee under New York law, the employee must be paid on a salary basis and meet the salary level threshold, in addition to meeting the duties prong of the exemption. This salary threshold is set by New York Department of Labor as being 75 times the applicable minimum wage. 

The minimum salary amounts for administrative and exempt employees, starting January 1, 2024 are:

For New York City, Westchester, and Long Island:

• 2024 – $1,200.00/week ($62,400.00 per year)
• 2025 – $1,237.50/week ($64,350.00 per year)
• 2026 – $1,275.00/week ($66,300.00 per year)

For the rest of New York:

• 2024 – $1,124.20/week ($58,458.40 per year)
• 2025 – $1,161.65/week ($60,405.80 per year)
• 2026 – $1,199.10/week ($62,353.20 per year)

Changes Affecting Food Service Workers Under Hospitality Wage Order

A “food service worker” is an employee other than a delivery employee who is primarily engaged in the serving of food or beverages to guests, patrons, or customers and who regularly receives tips from such guests, patrons, or customers.  The modified minimum cash wage, and overtime rates, and tip credit for such employees are:

For New York City, Westchester, and Long Island:

	Eff. 1/1/2024	Eff. 1/1/2025	Eff. 1/1/2026
Minimum Wage	$16.00	$16.50	$17.00
Cash Wage	$10.65	$11.00	$11.35
Overtime Cash Wage	$18.65	$19.25	$19.85
Tip Credit	$5.35	$5.50	$5.65

For the rest of New York:

	Eff. 1/1/2024	Eff. 1/1/2025	Eff. 1/1/2026
Minimum Wage	$15.00	$15.50	$16.00
Cash Wage	$10.00	$10.35	$10.70
Overtime Cash Wage	$17.50	$18.10	$18.70
Tip Credit	$5.00	$5.15	$5.30

Changes Affecting Service Employees Under Hospitality Wage Order

A service employee is an employee other than a food service worker who receives tips at or above a required “tip threshold” rate of tip compensation.  The modified minimum cash wage, overtime rates, tip credit, and tip threshold for such employees are:

For New York City, Westchester, and Long Island:

	Eff. 1/1/2024	Eff. 1/1/2025	Eff. 1/1/2026
Minimum Wage	$16.00	$16.50	$17.00
Cash Wage	$13.35	$13.75	$14.15
Overtime Cash Wage	$21.35	$22.00	$22.65
Tip Credit	$2.65	$2.75	$2.85
Tip Credit Threshold	$3.45	$3.55	$3.65

 For the rest of New York:

	Eff. 1/1/2024	Eff. 1/1/2025	Eff. 1/1/2026
Minimum Wage	$15.00	$15.50	$16.00
Cash Wage	$12.50	$12.90	$13.30
Overtime Cash Wage	$20.00	$20.90	$21.30
Tip Credit	$2.50	$2.60	$2.70
Tip Credit Threshold	$3.20	$3.30	$3.40

Changes to Meal Credit

Meals furnished by an employer to an employee may be considered part of an employee’s wages under various wage orders. Thus, some employers take a meal credit against an employee’s wages for each shift that the employee is furnished a meal.

For New York City, Westchester, and Long Island:

	Eff. 1/1/2024	Eff. 1/1/2025	Eff. 1/1/2026
Food Service Employees	$3.85	$3.95	$4.05
Service Employees	$4.45	$4.60	$4.75
Non-Service Employees	$5.50	$5.65	$5.80

 For the rest of New York:

	Eff. 1/1/2024	Eff. 1/1/2025	Eff. 1/1/2026
Food Service Employees	$3.80	$3.95	$4.10
Service Employees	$4.10	$4.25	$4.40
Non-Service Employees	$5.20	$5.35	$5.50

Changes to Uniform Allowance

Under New York law, if an employer requires an employee to wear a certain uniform, the employer can launder and maintain the uniform or pay the employee Uniform Maintenance Pay. Uniform Maintenance Pay is paid weekly and is dependent on the hours worked by the employee during the week. Under the Miscellaneous Wage Order, this allowance can be set off by monies paid in excess of minimum wage. Calculations need to be reviewed with the increased minimum wage to ensure any excess covers the allowance.

For New York City, Westchester, and Long Island:

	Eff. 1/1/2024	Eff. 1/1/2025	Eff. 1/1/2026
Work >30 Hours	$19.90	$20.50	$21.10
Work 20-30 Hours	$15.75	$16.25	$16.75
Work <20 Hours	$9.50	$9.80	$10.10

For the rest of New York:

	Eff. 1/1/2024	Eff. 1/1/2025	Eff. 1/1/2026
Work >30 Hours	$18.65	$19.25	$19.85
Work 20-30 Hours	$14.80	$15.30	$15.80
Work <20 Hours	$8.95	$9.25	$9.55

If you have any questions about these rates or compliance with these rates, please be sure to contact your Forework account managers.

The National Labor Relations Board (“NLRB” or the “Board”) recently expanded its rules for defining “joint employment” status for purposes of the National Labor Relations Act (the “Act”).  The new rule effectively lowers the bar for when two separate and distinct companies will be considered to be joint employers.  As a joint employer, the two companies will be equally liable for alleged violations of the NLRA, and their joint workforce may unionize into one bargaining unit.  For these reasons, it is important for employers to know these rules and recognize whether or not they are vulnerable to a joint employment liability with another company.  The NLRB’s new rule will take effect on February 26, 2024 and the new standard will be applied to cases filed after the rule becomes effective. 

The current NRLB rule for joint employment, promulgated in April 2020, is considered by many to be more favorable to employers because it requires the NRLB to differentiate between direct and indirect control over a worker by an employer, and it requires a showing of “substantial direct and immediate control” over the essential terms and conditions of employment of an employee before two distinct businesses will be considered a joint employer of that employee. 

Conversely, the new NLRB rule will not require any differentiation between direct and indirect control nor will it require consideration of whether or not the employer exercised that control.  Instead, the new rule merely provides that entities will retain joint employer status if they have authority to control essential terms and conditions of employment, even if the employer never actually exercises that control and their authority is indirect. These are the essential terms and conditions of employment that will be considered in the joint employment analysis:

1. Wages, benefits and other compensation – does one or more entity control this in relation to the employee who might be jointly employed?
2. Hours of work and scheduling – who controls the hours of work and scheduling (actually or indirectly)?
3. The assignment of duties to be performed – same; which entities have actual or indirect control?
4. The supervision of the performance of duties;
5. Work rules and directions governing the manner, means, and methods of the performance of duties and the grounds for discipline;
6. The tenure of employment, including hiring and discharge; and
7. Working conditions related to the safety and health of employees.

The new joint employment standard will be met when the employer has authority to control even just one of the above terms or conditions.  At this time it appears to be unclear how much indirect control is going to be deemed sufficient to find joint employer status.  The Board has responded to this by indicating that they will engage in a fact specific analysis on a case-by-case basis to determine whether two or more companies meet the standard.

Companies that share or coordinate control of a single worker in any capacity are vulnerable, under this new standard, to being a joint employer with the second entity or individual (in cases of domestic employment, for example, or cases of CDPAP fiscal intermediaries).  The higher the level of control, actual or indirect, the higher the likelihood that – in cases of employment disputes coming under the NLRA – both entities will be deemed responsible for the employment law violation.

Employers should evaluate their affiliations, subsidiary relationships, workforce sharing, staffing, or other arrangements where a single worker is being affected, coordinated, controlled, scheduled, or affected in terms and conditions of employment with another entity or individual.  Such a self-audit will help identify the level of exposure for the employer and provide an opportunity for the employer to engage in risk mitigation efforts. 

On November 16, 2023, Governor Hochul signed into law the New York Clean Slate Act, which, among other things, will impact how employers conduct background checks. In an effort to promote second chance hiring, the Clean Slate Act will require state and local authorities to automatically seal from public access certain criminal records of individuals who have satisfied their sentence and remain a law-abiding citizen for a certain period of time. Specifically, an individual will be given a “clean slate” under the following scenarios:

• For a misdemeanor conviction, the record will be sealed once 3 years have passed since the individual’s release from incarceration, or the imposition of sentence if there was no sentence of incarceration.
• For a felony conviction, the record will be sealed once 8 years have passed from the date the individual was last released from incarceration, provided (i) the individual does not have a criminal charge pending and (ii) the individual is not currently under the supervision of any probation or parole department.

The Act excludes convictions for sex crimes, murder, and other serious felonies, and applies only to criminal records of convictions under New York State’s penal law —meaning state and local authorities will not be required to seal criminal records of convictions under federal law or any other state’s criminal law.
Under the Act, which will go into effect November 16, 2024, employers will generally be prohibited from inquiring about sealed records or using sealed conviction records when making employment decisions. Notably, there are several exceptions under the Clean Slate Act, including entities that are required or authorized under state or federal law to conduct a fingerprint-based background check where a job applicant would be working with children, the elderly, or vulnerable adults. This includes home care and human services employers such as home care agencies and managed long-term care plans – which have a regulatory obligation to conduct a Criminal History Record Check on certain job applicants and employees – to inquire about and use sealed criminal records to make employment decisions.
Employers should review their employment practices and personnel policies relating to the use of criminal background checks and, if necessary, work with legal counsel to modify and implement those policies to ensure compliance with this Act.

On September 15, 2023, the New York City Department of Consumer and Worker Protection updated the City’s Earned Safe and Sick Time Act (ESSTA) regulations.  The changes are effective October 15, 2023. Here, we summarize the changes that covered New York City employers must be aware of:

1. Coverage under ESSTA

The revised regulations now explicitly state that an employee who works entirely remotely is not covered by ESSTA, even if the business for which they work is in NYC.  However, if the employee comes to New York City to “regularly perform” work in the City, any hours worked in New York City would be covered by ESSTA and would “count” towards any ESSTA accruals.  Again, however, the amended regulations make it clear that de minimis time in New York City from an otherwise remote or hybrid worker would not trigger ESSTA’s coverage.  Some discretion and judgment will have to be used by employers to assess the coverage status of any employees who potentially fall into this “de minimis” category.

2. Employer Size and Coverage

The amended regulations clarify that, for purposes of determining employer size under ESSTA, the employer’s total employee number counts, not just the number of employees working in New York City.  This is important because employers with 100 or more employees are required to provide up to 56 hours of ESSTA time to an employee per year, while smaller employers are only obligated to provide up to 40 hours.

3. Notice of Leave

The amended regulations require that an employer identify the manner and method that employees will seek leave in a written policy. The regulations  continue to differentiate between when notice may be required for an “unforeseeable” absence (“as soon as practicable”) and a “foreseeable” absence (up to seven days in advance of the absence), but make clear that an absence may only be considered “foreseeable” if the employee is aware of the need to use safe and sick time seven days or more before the use. Short of that, the absence is “unforeseeable.” Employers can require “reasonable methods” of providing advance notice, which now also may include sending an email to a designated email address or submitting a leave request in a scheduling software system, provided the employee has access to such system on non-work time, and has been trained on and given written instructions on how to use the system.

To align with the 2020 amendments to the ESSTA, the regulations now indicate that employers requiring written documentation of an employee’s need for sick time must reimburse employees for all fees charged by a licensed health care provider. Likewise, the employer must reimburse the employee for all reasonable costs or expenses incurred in obtaining documentation for safe time. Employers requiring written documentation for sick and safe time use must include the following information in a written policy: a statement of the requirement, the types of written documentation the employer will accept, and instructions on how employees can submit the documentation to the employer.

4. Paystub Reporting Changes

The 2020 amendments to the ESSTA created a requirement for employers to show “the amount of safe/sick time accrued and used during a pay period and an employee’s total balance of accrued safe/sick time . . . on a pay statement or other form of written documentation provided to the employee each pay period.”  The revised regulations clarify that employers must specify (1) the total balance and (2) the amount of time available for use if those two values differ (e.g., an employee with an 80-hour balance due to carryover of unused time from a prior calendar year may only have 56 hours “available” for use in the current calendar year if the employer imposes an annual usage cap).

Shortly after the 2020 amendment to the ESSTA, the Department issued informal guidance on its webpages indicating that employers could meet this reporting requirement “on a paystub or through an employee-accessible system.” The amended regulations now formalize this compliance option, and indicate that employers using an electronic system to issue pay statements or other documentation related to sick and safe time must: (i) electronically alert the employee each pay period to the availability of the required information; (ii) make the required content readily accessible by the employee outside of the workplace within the electronic system; and (iii) maintain accrual, use, and balance information for any past pay period in the electronic system so that it is readily accessible to the employee outside of the workplace.

The amended regulations make significant substantive changes to compliance requirements for ESSTA-covered employers.  In addition to procedural changes, employers will be required to amend their employee handbook policies and paystub reporting by the October 15, 2023 effective date.  @Forework, our team of employment attorneys and payroll experts are working on these changes already for our payroll clients and making the necessary changes to paystub reporting requirements. 

The New York State Department of Labor (DOL) has posted proposed regulations to implement New York’s Pay Transparency Law that was effective September 17, 2023.  Under this law, employers with four or more employees who advertise a job, promotion or transfer opportunity in New York are required to disclose the following: (i) compensation or a “range of compensation” for such job, promotion or transfer; and (ii) the job description for such job, promotion or transfer, if it exists.   Range of compensation means the minimum and maximum annual salary or hourly range of compensation for a job, promotion or transfer that the employer in good faith believes to be accurate at the time of posting of an advertisement. 

Remote Workers

The pay disclosure obligations in the law apply to advertisements for job, promotion, or transfer opportunities that “will physically be performed” in the state (emphasis added) or “that will physically be performed outside the state of New York” but “report[] to a supervisor, office, or other work site in the state of New York.”  Thus, the proposed regulations suggest that pay disclosure obligations apply to positions that could be filled remotely out of the state if the remote employee would report to an office in New York. At the same time, the proposed regulations state that “[i]ncidental or infrequent” visits to New York for work-related purposes, such as “for an occasional meeting or conference” would not alone be sufficient for the opportunity to be considered “physically” performed in the state. Additionally, “mere communication with employees based” in New York alone would not mean a job is “physically” performed in the state.

By its terms, the pay transparency law will not apply to temporary help firms as defined by New York labor law. However, the proposed regulations clarify that while the pay disclosure requirements do not apply to temporary help firms in hiring temporary workers for other businesses or organizations, the requirements would apply to temporary help firms when they advertise “opportunities to work for the temporary help firm itself.” For example, a temporary help firm would have pay disclosure obligations in an advertisement to fill an administrative assistant position at the firm.

Advertisements for a Job, Promotion, or Transfer Opportunity

The proposed regulations clarify that if an employer does advertise the opportunity, the pay range disclosure obligations would apply “regardless of the medium in which they are posted,” including but not limited to newspaper advertisements, printed flyers, a social media post, or an email to a pool of potential applicants.

The proposed regulations clarify that a job description would not be required in an advertisement if such a description does not exist. Additionally, the proposed regulations specify that in situations where an employer lists a job opportunity to cover multiple geographic locations or the listing is for an opportunity with differing levels of seniority, the employer would be required to provide “multiple ranges of compensation for each individual opportunity.”

Compensation Range Refers to Base Rate of Pay

The proposed regulations provide specifics on what would or would not be required to be included in the disclosed compensation range under the pay transparency law. According to the proposed regulations, employers would be required to disclose the “base rate of pay, regardless of the frequency of payment,” such as “an annual salary, an hourly wage, or a piece rate.” The compensation range would not include other benefits that may be offered in connection with the opportunity, such as health or life insurance, paid time off or vacation days, sick leave, retirement or savings plan contributions, severance pay, overtime pay, or “other forms of compensation such as commissions, tips, bonuses, stocks, or the value of employer-provided meals or lodging.”

According to the pay transparency law, employers must base the minimum and maximum annual salary or hourly rate on what they “believe[] in good faith” are the highest and lowest compensation amounts they will pay the position at the time of the advertisement. The proposed regulations would further define “good faith” belief as the range employers “legitimately believe[] they are willing to pay” for the position in consideration of other contextual factors, “such as the job market, current compensation levels, hiring budget,” and the experience and education level required for the position.

According to the proposed regulations, employers would be allowed to adjust the range if needed, based on information from the hiring process. For example, an employer would be able to raise the pay ranges if after posting for the position it determines that an increased hiring budget is necessary to attract candidates with the desired qualifications.

There will be a 60-day public comment period, during which employers and other stakeholders can provide comments. The comment period is set to expire on November 12, 2023.  In the meantime, the law is in effect and covered New York employers are expected to comply with its requirements.

On September 14, 2023, the IRS announced it has ceased processing new ERTC claims. The moratorium will last at least through the remainder of 2023.

The IRS has received over 3.5 million ERTC claims, and is behind on processing. They are now linking a recent influx of claims from ineligible taxpayers to illegal activity by third parties pressuring employers to apply by convincing them they are eligible for large refunds. Thousands of claims are being audited, and the IRS’ Criminal Investigation unit has begun over 250 investigations into nearly $3 billion in suspicious ERTC claims. Fifteen of those have yielded federal charges, including six convictions to date. Average incarceration time is 21 months. Note that employers who are deemed ineligible for the credit will not only have to repay the refund, but they will also owe interest and penalties. Businesses who already submitted an ERTC claim before September 14, 2023, can still expect their application to be processed, albeit at a slower pace. This applies to refunds as well, in light of the added compliance scrutiny now being done. Prior to the announcement, turnaround time for ERTC claims was about 90 days. Applicants can expect double that wait time now, and may get requests from the IRS for additional documentation.