Home Law An update on New York’s building service industry wage law

An update on New York’s building service industry wage law

Developments in the federal wage law and guidance since my previous guidance from September 2017 have greatly impacted the applicability of the wage order to nonunion, live-in superintendents.

The purpose of this article is to address these developments and identify practical issues that Westchester County building owners should consider when forming compensation policies for their employees.

Historically, residential building owners in Westchester County and New York City provided live-in superintendents a compensation package comprising a rent-free apartment and a salary paid biweekly or monthly. For decades, New York has had in place a building service industry wage order that sets wage requirements for residential building service employees. Yet, we’ve found that most residential building owners are not aware of the wage order, and thus have never considered whether their compensation practices comply with it.

Under the wage order, the minimum wage for residential building live-in superintendents is based upon the number of units in the building, instead of an hourly wage.

Currently, the wage order requires Westchester County building owners to pay superintendents $9.35 per unit, on a weekly basis. So, for example, a superintendent working in a 60-unit building must be paid $561 per week (i.e., 60 x $9.35). The wage order further provides that live-in superintendents are not entitled to overtime wages.

Based on the wage order alone, it would appear that New York building owners are exempt from paying live-in superintendents overtime wages no matter how many hours they work per week. That, however, is not the case.

Numerous decisions issued by New York federal judges since 2017 have held that federal wage law supersedes the New York wage order and requires the payment of overtime wages to live-in superintendents. In addition, on March 14, 2019, the U.S. Department of Labor (DOL) issued an opinion letter stating that the federal minimum wage and overtime requirements supersede the “per-unit” minimum wage and overtime exemption contained in the New York wage order.

The DOL opinion addresses the difficult task of tracking the actual hours worked by live-in superintendents, who are generally “on-call” after business hours to address emergencies and other needed work. The opinion states that an employee who resides on the employer’s premises is not considered to be working all the time they are there, and that normal private pursuits on the premises, such as eating, sleeping, entertaining and other periods of complete freedom from all duties, are not hours worked.

The DOL opinion further recommends that employers address the difficulty of tracking a superintendent’s on-premises hours by a “reasonable agreement” between the employer and employee that determines which hours on the premises are hours worked.

What are the practical implications of these developments in the law? New York building owners who employ a live-in superintendent should do the following to reduce the risk of a lawsuit:

· Analyze whether their compensation practices comply with the wage order; if not, revise the practice accordingly.

· Provide overtime pay to live-in superintendents and pay the federal minimum wage of $7.25 per hour if the weekly pay at that rate exceeds the weekly pay based upon the per-unit rate required by the wage order.

· Establish a reliable method to record superintendent overtime hours, such as a sign-in sheet or punch clock, which is required by New York and federal law. Many New York employers fail to keep these records, and as a result, have little or no defense to a superintendent’s overtime lawsuit.

· Consider entering into an agreement with superintendents that establishes which hours on the premises are considered “hours worked.”

This article is for informational purposes only and not for the purpose of providing legal advice. You should contact your attorney to obtain advice with respect to the specific circumstances of any employee wage issue or problem you may have.

Jack Malley

Jack Malley, of Smith Buss & Jacobs LLP in Yonkers, New York, is an employment lawyer, business litigator and the author of “Meet The Lunatics Who Run Your Kids’ Sports Leagues.”

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