As 2024 ends, hospitality industry employers should be aware of legal changes effective January 1, 2025. Below are highlights of these changes. If you have questions or need help implementing new policies, our team of experienced attorneys are here to help.
General Minimum Wage Increases
Effective January 1, 2025, the New York State minimum wage rate will increase by $0.50 as follows based on location:
Increase in Food Service Worker Tipped Rates
The tip credit and reduced tipped regular and overtimewage rates for food service workers will increase. Food service workers are workers primarily engaged in serving food or beverages to customers in the hospitality industry. Food service workers regularly and customarily receive tips from customers for the services directly provided to them. Examples of food service workers are waitstaff, bartenders, food runners, and bussers.
Remember that the tip credit is subtracted from the full minimum and overtime wage rates reflected above, under the“General Minimum Wage Increases” heading. It is not lawful to pay tipped employees 1.5 times their reduced tipped credit rate for hours worked over forty per workweek. For example, the overtime wage rate due to a tipped employee in New York City in 2025 is $19.25, equal to $24.75 (full overtime rate) minus the $5.50 tip credit. It would be incorrect and unlawful to pay the same tipped employee$15.98 per overtime hour worked (i.e., 1.5 times $10.65).
Increase in Service Worker Tipped Rates
The tip credit, the reduced tipped regular and overtime wage rates, and the minimum tip threshold for service workers will increase. Service workers are employees, other than food service workers, who customarily receive tips from customers in the hospitality industry. Examples of service workers include delivery workers and bathroom attendants.
Service workers cannot be paid at the reduced tipped rates listed below unless their weekly average tips equal or exceed the minimum tip threshold below. For example, a delivery worker in New York City in 2025 must receive at least $3.55 per hour in tips in a workweek for the $2.75 tip credit to apply.
Increase in Exempt Employee Salaries
The minimum weekly salary required for executive and administrative exempt employees will also increase as follows:
Other Increases
Finally, meal and lodging credits that hospitality industry employers may take against the wages of employees will also increase as follows:
Other Matters
Hospitality industry employers should always remember to provide a notice compliant with the requirements of the Wage Theft Prevention Act and tip credit requirements before implementing changes in their employees’ rates of pay.
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