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Industry Updates

Restaurants and Hospitality Businesses Beware: Minimum Wage Laws on the Rise

Written by
Guest Author

Now, more than ever, employers, and restaurants and hospitality businesses in particular, must stay abreast of the ever-changing minimum wage laws across the country. There has been a flurry of activity at both the state and local level to increase the minimum wage. To avoid expensive wage and hour individual and class actions, as well as other legal risks, employers must ensure compliance with all applicable wage laws.

In some states, the minimum wage is increasing for all non-exempt employees across the state, such as New Jersey (increasing the minimum wage to $8.60/hour in 2018), and Hawaii and Rhode Island (both of which are increasing the minimum wage up to $10.10/hour in 2018). In other states, however, local laws and employee-count rules may require employers to comply with different minimum wages throughout the state. For example, in both California and New York, the minimum wage is now dependent upon where the employee works within the state and how many employees the employer employs.

California’s statewide minimum wage is increasing to $11.00/hour in 2018, but only for employers employing 26 or more employees. Employers employing less than 26 employees will continue to be subject to the minimum wage of $10.50/hour. The minimum wage is higher in many of California’s largest cities, however. As of July 1, 2018, all non-exempt employees in San Diego and San Francisco must make at least $15.00/hour (making them two of the jurisdictions with the highest minimum wage in the country). The minimum wage for Los Angeles, which follows the state employee-count split, will increase on July 1, 2018 to $13.25 for employers employing 26 or more employees, and to $12.00 for employers employing less than 26 employees.

Like California, New York’s minimum wage is dependent upon where the employee works in the state. But unlike California, all regional minimum wages are set by the state legislature, rather than municipal governments. Minimum wages across the state will increase on December 31, 2017. Employers employing 11 or more employees must pay their New York City non-exempt employees at least

$13.00/hour, while employers employing less than 11 employees must pay their New York City non-exempt employees $12.00/hour. In the suburbs of New York City (Nassau, Suffolk, and Westchester Counties), non-exempt employees must earn at least $11.00/hour. The minimum wage for the remainder of the state is $10.40/hour. Notably, none of these rules apply for fast food workers. As of December 31, 2017, non-exempt employees working in New York City fast food restaurants must earn at least $13.50/hour, and those working in fast food restaurants outside the City must earn at least $11.75/hour.

California and New York are just two examples of jurisdictions with complex minimum wage structures. Illinois, Maryland, New Mexico, and Washington are all grappling with divergent increasing statewide and local minimum wage increases in 2018 as well.

And the increases will not stop in 2018. Many states and localities are steadily increasing their minimum wage to reach $15.00/hour within the next several years. Restaurant and hospitality business owners must continue to monitor the ever-changing minimum wage landscape in the coming years in order to remain compliant with all applicable wage and hour laws and stay clear of wage-and-hour-related litigation risk.

Blog written by the team at Pillsbury Winthrop Shaw Pittman, experts on employment law.

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