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1. Overtime Non-Compliance
At a minimum, non-exempt employees must be paid 1.5 times their regular rate of pay for all hours worked over 40 in a week. In some states, overtime is also paid for any hours over 8 in a day.
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2. Improper Handling Of Tip Credit
Tipped employees must be notified if a tip credit is being deducted and if they receive overtime, their overtime rate cannot be calculated using 1.5 times the credit rate.
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3. Improper Distribution Of Tips
& Service ChargesManagement is not allowed under any circumstances to keep any gratuities intended for employees except to cover their administration costs to process tips left on credit cards. Service charges added to a bill are to be fully distributed to employees unless clearly labeled as not for employees on the bill.
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4. Not Including Meals And Lodging
In Compensation CalculationsWhen calculating compensation for the purposes of figuring state unemployment insurance premiums, a value for meals and lodging must be included.
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5. Not Paying At Least Minimum Wage
In NYS non-tipped employees must be paid at least $7.25 per hour and tipped employees who earn at least $2.25 per hour in tips must be paid at least $5.00 per hour. These rates may be higher in other states.
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6. Paying Salary To Non-Exempt Employees
Most employees need to be paid an hourly wage at least equal to the minimum wage. They cannot be paid a shift , daily, or weekly wage.
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7. Non Payment Of Spread Of Hours Bonus
In NYS employees must be paid an extra hour of pay at minimum wage if there is more than a 10 hour spread between the time they clock in at the beginning of their workday and the time they clock out at the end of their day..













