New York Worker Classification: Exempt vs Non-Exempt Hospitality Roles

New York Worker Classification: Exempt vs Non-Exempt Hospitality Roles - Key Takeaways

• Exempt employees in New York hospitality must meet salary thresholds and specific job duties to avoid overtime pay.
• Non-exempt employees are entitled to overtime pay beyond 40 hours per week and must receive at least the state's minimum wage.
• The NY Hospitality Industry Wage Order regulates wages, overtime, tip credits, and additional pay provisions like the "spread of hours" rule.

Understanding the distinction between exempt and non-exempt roles in New York’s hospitality sector is essential for compliance.

This guide clarifies classifications, salary thresholds, and labor law implications.

For quick context, see our guide on non-exempt meaning.

1. Explaining Exempt Employee Classification in New York Hospitality

Exempt employees are not eligible for overtime pay under both the Fair Labor Standards Act (FLSA) and New York State labor laws.

To classify a hospitality worker as exempt, two primary criteria must be met: the nature of the employee’s job duties and the salary basis test.

Job Duties for Exempt Classification

The employee must perform executive, administrative, or professional duties as defined under FLSA standards.

For managerial roles, review restaurant manager duties.

Examples in hospitality may include managerial roles overseeing hotel operations, administrative tasks involving discretion and independent judgment, or professional positions requiring specialized knowledge. See the hotel manager role for a typical exempt example.

Salary Thresholds for Exempt Employees

Exempt employees must be paid a fixed salary that meets or exceeds state-mandated thresholds.

From January 1, 2025, these weekly minimum salaries are:

• New York City, Nassau, Suffolk, and Westchester Counties: $1,237.50 ($64,350 annually)
• Rest of New York State: $1,161.65 ($60,401.80 annually)

These amounts are scheduled to increase yearly—for example, in 2026, they rise to $1,275.00 and $1,199.10 weekly respectively.

For broader pay trends affecting hospitality, see hospitality wages 2025.

2. Non-Exempt Employee Classification and Wage Rules in New York Hospitality

Employees who do not meet exempt criteria are considered non-exempt, making them eligible for overtime compensation and minimum wage protections.

Overtime Entitlements for Non-Exempt Hospitality Workers

Non-exempt employees must receive overtime pay at 1.5 times their regular hourly wage for any hours worked beyond 40 in a workweek.

Avoid costly claims by understanding off-the-clock risks.

Minimum Wage Requirements for Non-Exempt Employees

As of January 1, 2025, New York's minimum wage rates for hospitality workers are:

• New York City, Nassau, Suffolk, and Westchester Counties: $16.50 per hour
• Rest of New York State: $15.50 per hour

These rates will increase annually, reflecting cost-of-living adjustments and regulatory changes.

For role-specific context, review the server job description.

3. Key Provisions of the New York Hospitality Industry Wage Order

The Department of Labor’s Hospitality Industry Wage Order tailors labor law requirements specifically for the hospitality sector.

This includes unique regulations on minimum wage, overtime rules, tip credits, uniform maintenance reimbursement, and the "spread of hours" provision.

Understanding the "Spread of Hours" Rule

This rule mandates that any workday exceeding ten hours must pay an additional hour at the minimum wage rate.

It supplements regular wages and overtime pay, recognizing the extended workdays common in hospitality settings.

Tip Credit Guidelines Under the Wage Order

The order outlines how employers may apply tip credits to wage calculations, ensuring employees receive at least minimum wage after accounting for tips.

When hiring, follow best practices for jobs for tipped employees.

4. Important Considerations for Classifying Hospitality Roles in New York

Proper classification requires both job duties and salary basis criteria be met simultaneously for exempt status.

Simply meeting the salary threshold without qualifying job duties will result in non-exempt classification, with all applicable wage and hour protections.

Frequent review of roles and compensation is important as salary thresholds and minimum wages increase annually.

Maintaining Accurate Record-Keeping

Employers should keep detailed records of employee hours, pay rates, job duties, and classifications.

This documentation supports compliance and helps resolve any disputes or claims.

5. Best Practices for New York Hospitality Employer Compliance

• Regularly audit employee classifications to confirm exempt or non-exempt status.
• Monitor annual changes in salary thresholds and minimum wages to adjust compensation timely.
• Implement clear job descriptions outlining duties relevant to classification, such as a bartender job description.
• Train payroll and HR personnel on state-specific hospitality wage laws and requirements.
• Maintain transparent communication with employees regarding their classifications and wage policies.

6. Helpful Resources for New York Hospitality Employers

For authoritative information and updates on worker classification and wage laws, consult these government resources:

• New York State Department of Labor Wage Orders
• Fair Labor Standards Act (FLSA) Overview
• New York State Department of Labor Minimum Wage Information

New York Worker Classification: Exempt vs Non-Exempt Hospitality Roles - Conclusion

Classifying hospitality employees correctly as exempt or non-exempt under New York law is essential for legal compliance and fair compensation.

Employers must understand the dual importance of job duties and salary thresholds, adhere to the Hospitality Industry Wage Order, and stay current with annual wage adjustments.

Regular review and thorough record-keeping will help hospitality businesses navigate these rules confidently and mitigate legal risks.