New York treats wage theft as a criminal offense, reflecting the state’s commitment to protecting workers. For businesses and employees alike, staying informed about wage and hour laws isn’t just a best practice—it’s a necessity. The Law Office of Jason Tenenbaum, P.C. employment lawyers help clients navigate these regulations confidently, offering guidance to avoid pitfalls and resolve disputes effectively.
This article breaks down key aspects of wage and hour compliance in New York, including recent updates, common violations, and practical strategies for businesses. We’ll also share how our firm supports clients in addressing these challenges.
Key Topics Covered:
- Federal vs. state wage and hour laws
- 2025 updates to minimum wage and overtime rules
- Frequent compliance mistakes and how to avoid them
- Real-world examples of wage disputes and resolutions
- Financial risks of noncompliance and proactive solutions
- How legal counsel safeguards businesses and workers
Core Principles of Wage and Hour Laws
Wage regulations exist to guarantee fair pay and safe working conditions. Both federal and state laws shape these standards, with New York often setting stricter requirements than national benchmarks.
Federal Standards: The Fair Labor Standards Act (FLSA)
The FLSA establishes baseline protections for most workers, covering:
- Minimum Wage: A federal floor of $7.25/hour (though most states set higher rates)
- Overtime: Time-and-a-half pay for hours exceeding 40 per week
- Child Labor: Restrictions on work hours and types of jobs for minors
- Recordkeeping: Mandated tracking of hours worked and wages paid
New York’s Enhanced Protections
New York law frequently exceeds federal requirements. Key distinctions include:
- Higher Minimum Wage: As of January 2025, $16.50/hour in NYC, Long Island, and Westchester; $15.50 elsewhere in the state. Annual adjustments based on inflation begin in 2027.
- Spread-of-Hours Pay: Workers with shifts spanning over 10 hours in a day earn extra compensation.
- Tip Credit Rules: Employers must ensure tipped staff (e.g., restaurant servers) meet minimum wage through base pay + tips. For example, NYC food service workers receive $11/hour in wages, with employers claiming a $5.50 tip credit.
- Aggressive Wage Theft Enforcement: New York prosecutors pursue wage theft cases criminally, not just civilly.
Why Compliance Matters: Overlapping federal and state rules create complexity. A payroll practice that meets FLSA standards might still violate New York law, exposing businesses to penalties.
Recent Changes Impacting Employers
Federal Overtime Pay Rule Rollback
In 2024, a proposed federal rule aimed to raise the overtime salary threshold to $55,068 annually. A Texas court blocked this update, leaving employers who had already adjusted salaries in limbo. Many now face tough decisions about rolling back pay increases or retaining them to maintain employee morale.
New York’s 2025 Updates
While federal efforts stalled, New York implemented its own changes:
- Exempt Salary Thresholds: To qualify for overtime exemptions, executive/administrative employees must earn:
- $1,237.50/week ($64,350/year) in NYC, Long Island, and Westchester
- $1,161.65/week ($60,405/year) in other regions
Immediate Steps for Employers:
- Update payroll systems to reflect new wage rates.
- Audit employee classifications to prevent mislabeling exempt/non-exempt roles.
- Train managers on updated break and overtime policies.
Common Compliance Pitfalls (and How to Avoid Them)
1. Misclassification Errors
Labeling workers as independent contractors or exempt employees to skirt overtime remains widespread. Example: A construction company classified foremen as exempt but required 60-hour weeks without overtime pay. Result: Back wages, penalties, and legal fees exceeding $250,000.
2. Overtime Miscalculations
Errors often occur when employers exclude bonuses or commissions from overtime rate calculations. Proper rates must include all nondiscretionary earnings.
3. Tip Credit Missteps
Restaurants risk violations if tipped staff don’t earn enough to meet minimum wage after tips. Regular payroll reviews help avoid this.
4. Off-the-Clock Work
Requiring employees to work through unpaid breaks or before/after shifts often leads to claims. Timekeeping systems should accurately capture all hours.
5. Inadequate Recordkeeping
Failing to maintain precise records for three years (as required) weakens defenses during audits or lawsuits.
Real-World Case Examples
Case 1: Restaurant Wage Recovery
A Manhattan bistro underpaid servers by miscalculating tip credits. Our firm recovered $92,000 in back wages and penalties through negotiation, avoiding protracted litigation.
Case 2: Construction Industry Misclassification
A contractor mislabeled 30 workers as independent contractors. After a state audit, we helped reclassify employees, establish compliant payroll practices, and settle penalties at 40% below initial assessments.
Case 3: Retail Break Violations
A chain store faced a class action for denying meal breaks. We implemented revised scheduling protocols and trained managers, reducing liability by 70%.
Financial Risks of Noncompliance
Violations trigger severe consequences:
- Back Pay + Liquidated Damages: Employees can recover up to double the owed wages.
- Civil Penalties: Up to $2,000 per violation under state law.
- Reputational Harm: Public lawsuits damage recruitment and customer trust.
Example: A Queens-based cleaning company paid $310,000 in back wages and fines after neglecting overtime rules for janitorial staff.
Proactive Compliance Strategies
Our “PROTECT” framework minimizes risks:
- Policy Development
Draft clear wage/hour policies aligned with current laws. Include protocols for overtime approval, break schedules, and timekeeping. - Regular Audits
Conduct quarterly payroll reviews. Check for classification errors, unpaid overtime, and proper record retention. - Manager Training
Educate supervisors on spotting potential violations. Use real scenarios to reinforce compliance. - Legal Partnerships
Collaborate with employment counsel to address gray areas, like exempt vs. non-exempt role criteria. - Transparent Communication
Share wage policies openly with staff. Provide easy channels for reporting concerns.
How We Assist Clients
The Law Office of Jason Tenenbaum, P.C. offers tailored support:
- Compliance Audits: Identify vulnerabilities before regulators do.
- Dispute Resolution: Negotiate settlements or defend claims in court.
- Policy Customization: Adapt employee handbooks to reflect regulatory changes.
- Training Workshops: Interactive sessions for HR teams and managers.
Final Considerations
New York’s wage laws reward diligence. Businesses that prioritize compliance avoid costly disputes and foster employee trust. For those facing audits or claims, early legal intervention often reduces penalties and resolves issues efficiently.
Act Now: Review your payroll practices this month. Update policies, train staff, and consult legal experts to address gaps.
Contact The Law Office of Jason Tenenbaum, P.C.
For assistance with wage/hour compliance or disputes, reach out today:
📞 Call: 516-750-0595
📧 Email: [email protected]
We provide audits, policy templates, and litigation support to protect your business.
Disclaimer: This article offers general information and does not constitute legal advice.
