NEW YORK — New York Governor Andrew Cuomo’s “Fast-Food Wage Board” on July 22 recommended that the state Department of Labor administratively increase the state minimum wage for quick-service restaurant (QSR) workers to $15 an hour in New York City by the end of 2018 and in the rest of the state by the end of 2021.

The Wage Board adopted a far-reaching definition of “fast-food establishments” that would capture chain and franchise convenience stores, according to the New York Association of Convenience Stores (NYACS).

The increases would take effect according to the following schedule:

New York City

• $10.50 on 12/31/15
• $12.00 on 12/31/16
• $13.50 on 12/31/17
• $15.00 on 12/31/18

Rest of State

• $  9.75 on 12/31/15
• $10.75 on 12/31/16
• $11.75 on 12/31/17
• $12.75 on 12/31/18
• $13.75 on 12/31/19
• $14.50 on 12/31/20
• $15.00 on 07/01/21

The Wage Board’s definition:

“Fast Food Employee” shall mean any person employed or permitted to work at or for a Fast Food Establishment by any employer where such person’s job duties include at least one of the following: customer service, cooking, food or drink preparation, delivery, security, stocking supplies or equipment, cleaning, or routine maintenance.

“Fast Food Establishment” shall mean any establishment in the state of New York serving food or drink items: (a) where patrons order or select items and pay before eating and such items may be consumed on the premises, taken out, or delivered to the customer’s location; (b) which offers limited service; (c) which is part of a chain; and (d) which is one of thirty (30) or more establishments nationally, including: (i) an integrated enterprise which owns or operates thirty (30) or more such establishments in the aggregate nationally; or (ii) an establishment operated pursuant to a Franchise where the Franchisor and the Franchisee(s) of such Franchisor owns or operate thirty (30) or more such establishments in the aggregate nationally.

“Chain” shall mean a set of establishments which share a common brand, or which are characterized by standardized options for décor, marketing, packaging, products, and services.

“Franchisee” shall mean a person or entity to whom a franchise is granted.

“Franchisor” shall mean a person or entity who grants a franchise to another person or entity.

“Franchise” shall have the same definition as set forth in General Business Law Section 681.

“Integrated enterprise” shall mean two or more entities sufficiently integrated so as to be considered a single employer as determined by application of the following factors: (i) degree of interrelation between the operations of multiple entities; (ii) degree to which the entities share common management; (iii) centralized control of labor relations; and (iv) degree of common ownership or financial control.

“Obviously, the cost implications would be a major blow to many of our retail members,” said James Calvin, NYACS president. “We plan to meet with the state Labor Commissioner, who now has several weeks to decide whether to adopt these recommendation as is or with revisions, to show him how illogical and impractical it would be to include convenience stores in the fast-food wage hike.”

He continued, “Foodservice is a part of our business, not our primary business. In fact, it represents less than one-fifth of convenience store sales on average. Our valued employees are cross-trained to prepare food and perform a variety of other, unrelated functions inside the store–they are a separate and distinct class of workers from the group of employees we believe the Wage Board was created to examine.”

Frustrated with the Republican state Senate’s refusal earlier this year to approve his legislative proposals to dramatically increase the state minimum wage across the board, Democratic Governor Cuomo had his Labor Commissioner appoint the Wage Board pursuant to an obscure provision of state Labor Law allowing him to bypass the legislative process and administratively impose a minimum wage higher than the statutory minimum for a specific industry deemed to be woefully underpaid.

According to statute, board must now finalize and submit a report to Acting State Labor Commissioner Mario J. Musolino. It is scheduled to meet on July 27 to approve its report. The board’s report and recommendations will then be published and followed by a 15-day public comment period. Based on those comments, the commissioner may accept, reject or modify the board’s recommendations and file a wage order. The wage order must be filed within 45 days once the report is filed. The order is then subject to an additional regulatory process.

Click here for details on the Fast-Food Wage Board’s vote.