I. 2013-2014 Budget Update - New York State Hospitality & Tourism ...

I. 2013-2014 Budget Update
Tourism Funding & Initiatives: 2013-2014 State Budget
I Love NY / Matching Grant Program: The 2013-2014 State Budget includes a total
reduction of $500,000 from last year’s enacted budget to the I Love NY and Matching
Grant Programs. The budget provides funding for the I Love NY at $2.5M for the
coming year ($330,000 reduction from the 2012-2013 State Budget) and $3.815M
($170,000 reduction from the 2012-2013 State Budget) for the Matching Grants
program. Further, the welcome centers in Binghamton and Beekmantown were funded
at their historical levels of $196,000 each. Additional funding for the Queens Tourism
Council ($70,000) and the Finger Lakes Tourism Alliance ($75,000) was also included
in the enacted State Budget.
Regional Economic Development Councils: The State Budget will launch a third
round of the Regional Economic Development Council (REDC) grants, which very
much rewarded tourism projects during rounds one and two. It is critical that the
tourism industry projects continue to be emphasized during this third round and support
the Administration’s efforts to keep New York Open for Business. NYSH&TA will
continue to push for pro-tourism initiatives as each regional strategic plan is being
formulated and reviewed by the State in the coming year.
Market NY: In addition to the I Love NY and Matching Grant programs, the
Governor unveiled in his State of the State and Executive Budget proposal additional
funding for tourism initiatives: Market NY and Taste-NY. The final budget will
includes additional tourism funding of $7M for the new Market NY program.
• Market NY: The State will make available $7 million in new competitive
funding to be provided through the Department of Economic Development
(DED) to support winning tourism marketing plans that best demonstrate
regional collaboration among counties to promote regional attractions.
We will continue to work with the Administration and the Legislature on all critical funding streams and
avenues for the tourism industry.
In addition to funding initiatives the State Budget included proposals related to raising the minimum
wage, unemployment insurance and workers compensation reform.
Minimum Wage:
The 2013-2014 State Budget includes provisions to incrementally raise the minimum wage to $9 by 2015.
Additionally, to help affected businesses, the State Budget also includes tax credits for employers paying
the minimum wage as well as those hiring youth (up to 24 years of age).
The State Budget raises the minimum hourly wage that every employer must pay its employees from the
current rate of $7.25/hour (Current Federal Minimum Wage) to $9.00/hour incrementally over the next
three years.
• Beginning on December 31, 2013 employers must pay employees a minimum of $8.00/hour;
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• The amount increases to $8.75/hour as of December 31, 2014; and
• Increases again to $9.00/hour on December 31, 2015.
These amounts are subject to change if Congress implements a higher minimum wage at the federal level.
The State Budget did not increase the minimum wage for tipped employees, however, it does include a
section that specifically addresses how to apply these increases to the hourly wage paid in either cash or
meal/lodging credits to food service and service employees. The commissioner must issue a wage order
modifying the maximum credit for tips and cash wages to equal the minimum wage. In order to
effectuate these changes, the commissioner will appoint a wage board and follow a procedure for
adopting its reports and recommendations. The wage board must act within 6 months after it is
established. Wilson Elser will work to ensure that NYSH&TA representatives will be a part of the Wage
Order negotiations when the Commissioner convenes the board. Historically, NYSH&TA has always had
a seat at the table during Wage Board negotiations.
Unemployment Insurance:
The 2013-2014 State Budget reforms the State’s Unemployment Insurance System.
Specifically, the reforms are:
• Incrementally increases the wage base from $8,500 to $13,000 over the next 13 years and indexes
the wage base to 16 percent of the state’s average annual wage rate thereafter;
• Incrementally increases the maximum weekly benefit from $405 through the year 2026 and
thereafter indexes the benefit to 50 percent of the average weekly wage;
• Provides for decreased benefits for those receiving severance or pensions;
• Removes obligations of an employer when an employee is terminated or resigns;
• Provides greater incentive for the unemployed to seek employment by mandating more employer
contact and reducing the amount of time an employee may refuse employment;
• Makes permanent the ability for the Department of Labor to assess surcharges for interest
payments on federal government UI benefits loans.
In the past by working with the Business Council and other business oriented Associations, NYSH&TA
worked with the Administration and other to come up with a “wish list” of specific, realistic
unemployment reforms in return for unemployment benefits and taxable wage base increases. This
proposal came about and was enacted as a result of those efforts.
Workers Compensation:
Further, the State Budget proposal contains a series of reforms which the Governor believes will benefit
all businesses with employees by reducing the cost of purchasing workers’ compensation insurance. The
administration estimates that the reforms will provide $900 million in savings to employers by reducing
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assessments and streamlining the system, while a new bonding program will assist 10,000 businesses in
defaulted trusts resolve their liabilities.
In total, the State Legislature and the Governor believe that businesses will save $1.3 billion as a result of
reforms to modernize and simply the state’s workers’ compensation and unemployment insurance
programs. The savings do not impact workers’ benefits.
III.
Legislation / Issue Updates
A. Service Charge
During the 2012 Legislative Session, legislation was introduced and amended several times that would
place in statute, the past practices of catering hall facilities based on Department of Labor regulations for
the imposition of service charges prior to the Court of Appeals decision in the World Yacht, Inc. case.
This legislation is necessary and supported by NYSH&TA because it will put an end to current lawsuits
brought by employees to recover what they perceive to be their fair share of service charges prior to the
court decision. Currently, employees have won prior lawsuits with substantial awards being granted to
them by the courts, and thus jeopardizing the ability of the catering/banquet industry to provide affordable
services, and in some cases, if these lawsuits are continued to be brought, forcing them to close their
operations entirely.
NYSH&TA continues to work with the Hotel Association of New York City, the New York State
Restaurant Association and caterers to garner support for passage of this legislation during the current
legislative session. NYSH&TA and Wilson Elser will continue to keep you up to date on this important
issue.
B. Wage Theft
The Wage Theft Prevention Act, which went into effect on April 9, 2011, amended the notice of wage
rate requirements and expands the civil and criminal remedies that are available when employers fail to
comply with its provisions. The new law requires that employers provide notice to employees of their
rate(s) of pay, designated pay day, the employer’s intent to claim allowances (like tip or meal allowances)
as part of the minimum wage, and the basis of wage payment (whether paying by hour, shift, day, week,
piece, etc.). More importantly, the law requires that the notice contain the employer's "doing business as"
names, and that it be provided at the time of hiring, annually on or before February 1st of each year of
employment, and within 7 days of a change if the change is not listed on the employee’s pay stub for the
following pay period. Further, the new law clarifies and expands the Department of Labor’s authority to
enforce the Labor Law, and expands an employee’s ability to bring complaints and private actions for
such violations. The protection against prohibited retaliation is strengthened by closing loopholes on what
actions constitute retaliation and expands the remedies available to employees.
In response to overwhelming compliance issues from the business community relating to the annual
notice requirement, Senator DeFrancisco (R-Syracuse) and Assemblyman Dennis Gabryszak (D-
Cheektowaga) have once again introduced legislation (S2313/A2482) which, if enacted would repeal that
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provision. NYSH&TA will work in conjunction with the Main Street Small Business Coalition and the
Business Council to push for the Legislature and the Governor to agree on legislation relating to this issue
during the current legislative session.
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