Spreading the Pain: New York Hospitality Wage Order Makes All Restaurant and Year-Round Hotel Workers Eligible for Spread-of-Hours Pay

To state the obvious-- legal terms can be confusing. When mixed in with already confusing state wage and hour laws, employers can be left throwing up their hands in surrender. Take “spread of hours,” for example, which could mean practically anything-- though in practice, it mostly means headaches for well-intentioned employers.

“Spread of hours” is essentially the spread of time from the first hour an employee works in a day, through the end of that employee’s last shift. This is not the same as the number of hours that an employee works in a day. For example, many employees in the hospitality industry work a lunch shift, have a lengthy break, and then return to service the dinner crowd. Their “spread of hours” could be 11 ½ hours — an 11:00 a.m. start for the lunch shift through a 10:30 p.m. end after dinner even if the employee only worked 11:00-2:00 for lunch and 5:30-10:30 for dinner (8 hours).

A New York labor law regulation, § 142-2.4, requires that employees working a “spread of hours” that is more than 10 hours in any working day, receive an extra hour’s pay at minimum wage (currently $7.25/hour under both Federal and New York law). There’s been a difference of opinion, though, as to whether this rule applied to all employees or only those being paid at or near the minimum wage.

The recent New York Hospitality Wage Order eliminates the ambiguity, at least as it applies to certain workers in the hospitality industry. The Wage Order provides that “[s]pread of hours . . . is due to all employees at any pay rate, not just to those paid at or very near to the minimum wage.”

The Wage Order requires that all employees in restaurants and year-round hotels, regardless of pay rate, receive an extra hour pay at minimum wage when their spread of hours in a day is greater than 10. There is no room for discussion—if a restaurant or year-round hotel worker’s beginning and end times in a work day are separated by more than 10 hours in a day, then the employer still owes him or her an extra hour’s pay, even if this person is being paid $10, $15, $20 (or more!) dollars an hour. Failure to pay spread of hours pay can make an employer liable for any amounts found to be due the employee, along with potential fines, fees, penalties and interest.

It remains to be seen whether the DOL will apply this uniformly to all industries, or whether ambiguity will still reign outside the hospitality industry.
 

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