Prevailing Wage Tip Credits And Misclassification

Prevailing Wage, Tip Credits and Misclassification Attorney in New York

New York City Lawyers Helping Assert the Rights of Employees

You work hard at your job and deserve to enjoy the fruits of your labor. Many employers, however, will do whatever it takes to save a few dollars and make their businesses richer—even when it comes to cutting their employees’ paychecks short. Fortunately, there are many New York laws that protect workers and require employers to pay a prevailing hourly wage. At Phillips & Associates, our wage violations attorneys have assisted many employees in New York City with exploring their options and bringing claims based on employer misconduct.

Prevailing Wage Requirement Laws

Starting on December 31, 2014, the State of New York requires all employers to pay their employees a minimum wage of $8.75 per hour. This amount is known as the prevailing wage, and it applies to many different sectors, including farm labor and domestic workers. These laws also require employers to provide an overtime wage equal to one-and-a-half times the employee’s regular hourly pay for each hour worked over 40 hours in a week. These laws also provide protections for employees when it comes to meal periods and rest breaks, which employers must provide to employees at predetermined intervals.

When it comes to tradespeople who are working on public and government-related contracts, the law requires workers to receive a minimum amount of pay and benefits, regardless of whether they are union members. In some instances, the wage may exceed $40 per hour in addition to fringe benefits. Many tradespeople are unaware of the laws that apply to them and fail to collect the pay that is owed to them.

Tip Credits

Under federal and New York State law, employers are allowed to pay tipped employees an amount less than the minimum wage, as long as the employee receives enough money in tips to make up the difference. This is called a “tip credit,” which the employer is allowed to take. Tip credits differ from industry to industry. For example, under New York law, an employee in a restaurant who is a “Food Service Worker” must have a $5.00 minimum hourly wage with a $3.75 maximum hourly tip credit, and if the employee doesn’t earn at least an average of $3.75 per hour in tips, the employer must pay the difference. Also, the employer getting the tip credit isn’t automatic; there are certain prerequisites that an employer must fulfill before being entitled to gain the benefit of a tip credit. For example, under New York law, an employer might have to first provide the employee with written notice and the employee must sign a form acknowledging that a tip credit is being taken. If the employee is never given the tip credit terms in writing and is never asked to provide a written acknowledgement, the employer might be precluded from using a tip credit and could owe the employee money for not paying minimum wage.


Some employers try to misclassify workers as independent contractors. An independent contractor is someone who is not an employee and who is not entitled to the same benefits as an employee. In an employee-employer relationship, the employee is generally subject to the employer’s direction, supervision, and control. The employer can set the employee’s place and hours of work and assign tasks to the employee. An independent contractor, on the other hand, is free to refuse work and generally sets his or her hours. In an effort to avoid paying an employee appropriately under the law, an employer may intentionally misclassify a worker.

Contact an Experienced Wage and Hour Attorney in New York City

If you believe that your employer is not adhering to the prevailing wage laws, you may be entitled to compensation. At Phillips & Associates, our New York City lawyers have helped victims of employee misclassification and other abuses of wage and hour laws. We have investigated the claims of individuals throughout the five boroughs of the city, including in Manhattan, Brooklyn, and Queens. State and federal laws provide a number of penalties against employers that fail to comply with wage and hour laws, and in some cases they may impose monetary penalties against an employer for violations. We offer a free initial consultation to discuss your claim. Call us at (866) 229-9441 or contact us online to set up an appointment.

What Our Clients Say:

    "He covered every angle and was able to help me with my dispute. I would recommend Jesse Weinstein and Phillips and Associates in the future to anyone."

    - Margaret

    "Being in the restaurant industry for more than 30 years I can say that this law firm is the number one choice for workers in the restaurant business that need to sue their company for wrongful termination."

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