New York’s Spread of Hours (SOH) rule can be a costly pitfall for employers who aren’t familiar with industry-specific wage orders. The rule requires additional one-hour pay at minimum wage when an employee’s workday lasts 10 hours or more, from their first punch-in to the last punch-out—including breaks. However, not every employer is required to pay it.
The Hospitality Industry Wage Order and Miscellaneous Industry Wage Order each have unique rules on when SOH applies—and, importantly, when it does not. If you pay employees over minimum wage, you may be exempt.
This guide breaks down SOH pay by industry, common employer mistakes, and how to stay compliant.
What Is Spread of Hours Pay?
The Spread of Hours (SOH) rule applies when an employee’s workday—from first clock-in to final clock-out—exceeds 10 hours, including unpaid meal breaks and split shifts.
Employees covered under SOH must receive an extra hour of pay at the state minimum wage.
SOH is NOT overtime—it is a separate one-hour premium that must be paid in addition to regular wages when the total spread of hours in a day meets or exceeds 10.
This extra hour does not count toward total hours worked for the week and is not factored into overtime calculations. If an employee works 12 hours in one day, they are paid for 12 hours at their regular wage, plus one extra hour at minimum wage, but their total weekly hours for overtime purposes remain 12, not 13.
However, whether an employer must actually pay SOH depends on which wage order applies and how much the employee is paid.
📌 Payroll Best Practice: SOH pay should always appear as a separate line item on employee pay stubs. Some employers mistakenly assume that for minimum wage employees, they can simply add an extra hour of wages. However, failing to clearly document SOH payments can make it difficult to prove compliance in the event of an audit. To avoid issues, employers should list the SOH premium as its own distinct payment to maintain accurate records and prevent potential legal disputes.
How Spread of Hours Works in Different NY Wage Orders
Hospitality Industry Wage Order (Restaurants & Hotels)
The Hospitality Industry Wage Order (which applies to restaurants, hotels, and food service businesses) has the strictest application of the SOH rule:
All non-exempt employees are eligible for SOH pay, regardless of their regular hourly rate.
Even if an employee earns above the minimum wage, the employer must still pay SOH.
Example: A waiter works a double shift from 10:00 AM to 9:30 PM with a break from 2:00 PM to 4:30 PM.
Total work time: 9 hours
Total spread of hours: 11.5 hours
✅ SOH applies—must pay an extra hour at minimum wage.
Hospitality Employers Cannot Avoid SOH Pay. Even if the employee earns significantly more than minimum wage, SOH must be paid.
Miscellaneous Industry Wage Order (Retail, Offices, Other Businesses)
The Miscellaneous Industry Wage Order covers all industries except hospitality and farmworkers. Here, SOH only applies if the employee’s total pay for the week falls below:
(Hours Worked × Minimum Wage) + SOH Pay
If an employee’s total weekly earnings exceed this amount, SOH is NOT required.
Example: A retail worker in NYC earning $17/hour works from 8:00 AM to 8:30 PM (12.5-hour spread of hours).
Total worked: 9 hours
Total earned: $153 ($17 × 9)
SOH Threshold: ($16 × 9) + $16 = $160 ❌ NO SOH PAY REQUIRED—because total earnings exceed threshold.
✅ If the worker had earned only $16/hour, SOH would apply.
Employer Mistakes & Financial Impact
Mistake #1: Failing to Pay SOH in Hospitality
A restaurant owner assumes SOH doesn’t apply because their waitstaff makes well above minimum wage due to tips. However, under the Hospitality Wage Order, SOH must be paid regardless of total earnings.
💰 Final Employer Cost for 15 Employees Over 2 Years:
Unpaid SOH per shift: $16 (NY minimum wage for 2024)
Total violations per employee per week: 5 shifts × $16 = $80/week
Total unpaid wages over 2 years: $80 × 52 weeks × 2 years = $8,320 per employee
Liquidated damages (double the unpaid wages): $8,320 per employee
WTPA penalties: $5,000 per employee (max per violation)
Additional WTPA Liquidated Damages: $5,000 per employee
📌 Total Employer Cost for 15 Employees:
Back pay: $8,320 × 15 = $124,800
Liquidated damages: $124,800
WTPA penalties: $5,000 × 15 = $75,000
Additional WTPA Liquidated Damages: $5,000 × 15 = $75,000
✅ Final total cost: $399,600 plus attorney’s fees and additional penalties.
Mistake #2: Not Checking SOH Threshold for Miscellaneous Industry Workers
A retail employer deducts SOH pay from employees earning $17/hour, assuming they don’t need to pay it. However, some employees only work 30-hour weeks, meaning their total earnings fell below the threshold.
💰 Final Employer Cost for 10 Employees Over 2 Years:
Unpaid SOH per shift: $16 (NY minimum wage for 2024)
Total violations per employee per week: 4 shifts × $16 = $64/week
Total unpaid wages over 2 years: $64 × 52 weeks × 2 years = $6,656 per employee
Liquidated damages (double the unpaid wages): $6,656 per employee
WTPA penalties: $5,000 per employee (max per violation)
Additional WTPA Liquidated Damages: $5,000 per employee
📌 Total Employer Cost for 10 Employees:
Back pay: $6,656 × 10 = $66,560
Liquidated damages: $66,560
WTPA penalties: $5,000 × 10 = $50,000
Additional WTPA Liquidated Damages: $5,000 × 10 = $50,000
✅ Final total cost: $233,120 plus attorney’s fees and additional penalties.
Mistake #3: Miscalculating SOH Due to Split Shifts
An office schedules workers for a 7 AM - 11 AM morning shift and a 4 PM - 9 PM evening shift. The spread of hours is 14 hours, but the employer fails to recognize that SOH applies.
💰 Final Employer Cost for 8 Employees Over 2 Years:
Unpaid SOH per shift: $16 (NY minimum wage for 2024)
Total violations per employee per week: 3 shifts × $16 = $48/week
Total unpaid wages over 2 years: $48 × 52 weeks × 2 years = $4,992 per employee
Liquidated damages (double the unpaid wages): $4,992 per employee
WTPA penalties: $5,000 per employee (max per violation)
Additional WTPA Liquidated Damages: $5,000 per employee
📌 Total Employer Cost for 8 Employees:
Back pay: $4,992 × 8 = $39,936
Liquidated damages: $39,936
WTPA penalties: $5,000 × 8 = $40,000
Additional WTPA Liquidated Damages: $5,000 × 8 = $40,000
✅ Final total cost: $159,872 plus attorney’s fees and additional penalties.
Final Thoughts: Fighting the Good Fight
At Jacobs & Associates, we believe that businesses can be both good and generous employers while also following the law and protecting their business interests. Treating employees fairly—like valued team members or even family—doesn’t mean overlooking compliance. In fact, ensuring clear policies, proper documentation, and proactive problem prevention is the best way to create a fair and legally sound workplace.
By following Spread of Hours laws correctly, employers can avoid costly back pay lawsuits, prevent wage audits, and foster trust within their workforce.
If you need guidance on wage compliance, industry-specific wage orders, or SOH calculations, reach out for expert legal support.
Keep Fighting the Good Fight.
