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Is it OK for a restaurant to pay workers a daily or weekly rate?

Restaurants have different compensation arrangements with their employees. Many workers are paid on an hourly basis, but some restaurants offer a flat daily or a weekly rate – such as $100 a day or $600 a week. Is it legal for a restaurant to pay you this way? The answer is maybe, depending on where you work and whether you are paid minimum and overtime wages required under New York law. 

Minimum Wage

Restaurant workers, like most employees, must be paid at least the minimum wage for each hour they work. The minimum wage is $15 per hour in New York City, Long Island, and Westchester and $13.20 elsewhere in New York State, although employees who regularly receive tips can be paid at lower hourly rates ($10 in downstate New York and $8.80 in the rest of the state) if their tips are enough to bring their pay above the minimum wage rate. 

If you work in a restaurant in New York City, you must be paid hourly. If your employer pays you at a daily or weekly rate, then your regular rate of pay is calculated by dividing your total weekly earnings by a maximum of 40 hours, even if you work more than 40 hours (if you work less than 40 hours, then you divide your weekly earnings by the number of hours you worked that week). 

For example, if you earn $200 per day for 5 days of work ($1,000 per week), and you worked a total of 50 hours that week, then your regular hourly rate of pay is $25 per hour ($1,000 divided by 40 hours). This is more than the minimum wage rate, so there are no minimum wage violations, but you are likely owed overtime wages for the hours you worked over 40 that week (which is discussed in the overtime pay section below). 

If you work outside of New York City and your restaurant pays you at a daily or weekly rate, then your regular rate of pay is calculated by dividing your total weekly pay by all of the hours you worked. So under the same scenario, an employee outside of NYC who makes $1,000 per week working 50 hours would have a regular rate of $20 per hour ($1,000 divided by 50 hours). 

Overtime Pay

Except for a small number of executive, managerial, or administrative employees who are exempt from overtime, most restaurant workers must be paid overtime for every hour they work over 40 hours per week, even if they are paid on a daily or weekly basis. Overtime is paid at 1.5 times your regular hourly rate of pay. 

So in the above example, the employee who works in NYC with an hourly rate of $25 would be owed $37.50 ($25 x 1.5) for every overtime hour worked, while an employee working outside of NYC with the same pay and same hours would have an overtime rate of $30 ($20 x 1.5). Either way, an employer who pays a restaurant worker by the day or by the week probably isn’t paying overtime properly. 

And keep in mind that an employer’s obligation to pay you overtime cannot be waived, even if you and your employer agree to do so.  

Are you entitled to minimum or overtime wages?

If you have not been paid the minimum wage or overtime for the hours you have worked, contact an employment attorney at Katz Melinger PLLC at 212-460-0047 or online.

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The Attorneys of Katz Melinger PLLC