New York Law Review

Tag: State university

  • Faculty Student Ass’n of State Univ. of Oneonta, Inc. v. Ross, 54 N.Y.2d 462 (1981): Minimum Wage Requirements for University-Affiliated Organizations

    54 N.Y.2d 462 (1981)

    An organization affiliated with a state university, but not itself a part of the state government or a political subdivision, is not exempt from the state’s minimum wage law for its non-student employees.

    Summary

    The Faculty Student Association of the State University of Oneonta, Inc. (FSA), a non-profit corporation promoting educational and social relations at the university, was ordered to pay its non-student employees the state minimum wage. FSA appealed, arguing it was exempt as an appendage of the State University, which itself was exempt. The Industrial Board of Appeals revoked the order, but the Court of Appeals reversed, holding that the statutory exemption applied only to the State government or its political subdivisions, and FSA did not qualify. Therefore, FSA’s non-student employees were entitled to the minimum wage.

    Facts

    The Faculty Student Association of the State University of Oneonta, Inc. (FSA) is a non-profit organization. Its purpose is to foster educational and social connections among students and faculty at the State University. The Industrial Commissioner ordered FSA to pay $355.76 for underpayment to 21 non-student employees because they were not paid minimum wage for specified periods.

    Procedural History

    1. The Industrial Commissioner ordered FSA to remit payment for underpaid wages.
    2. FSA appealed to the Industrial Board of Appeals, arguing exemption from the Minimum Wage Act.
    3. The Industrial Board of Appeals revoked the Commissioner’s order, deeming FSA a mere appendage of the State University College at Oneonta, which was exempt.
    4. The Appellate Division affirmed the Board’s decision.
    5. The New York Court of Appeals reversed the Appellate Division’s order, reinstating the Industrial Commissioner’s original order.

    Issue(s)

    Whether the non-student employees of the Faculty Student Association of the State University of Oneonta, Inc., are entitled to payment of the minimum wage under Article 19 of the Labor Law.

    Holding

    Yes, because the Faculty Student Association is not part of the State government or a political subdivision thereof, and therefore does not fall under the statutory exemption from minimum wage requirements.

    Court’s Reasoning

    The Court of Appeals reasoned that the Minimum Wage Act (Labor Law, Art. 19) applies to non-profit institutions like FSA, requiring employers to pay at least the statutory minimum wage. The term “employee” is broadly defined, with specific exceptions. FSA argued it should be exempt under the exception for individuals employed by a state government or political subdivision. However, the court found that FSA, while affiliated with the State University, is not itself part of the state government or a political subdivision. The court emphasized the statute provides for exemption based on the nature of the employing organization, not its purpose. The court distinguished Matter of Beth Israel Hosp. Housing Co. (Catherwood), noting that the exemption statute in that case was based on the purpose for which the institution was organized and operated, whereas here, the statute focuses on the nature of the employing organization. Therefore, regardless of FSA’s purpose or its relationship to the university, it is not the State government, and its employees are entitled to minimum wage. The court stated, “[I]t matters not for what purpose petitioner is organized, nor that petitioner might be considered a ‘mere appendage’ of the college; since it is not the State government or a political subdivision thereof, its employees do not come within the exception, and therefore are entitled to the minimum wage.”

  • Faculty Student Ass’n v. Ross, 54 N.Y.2d 460 (1981): Minimum Wage Requirements for Non-State Entities

    54 N.Y.2d 460 (1981)

    Employees of a non-profit organization, even if affiliated with a state entity, are entitled to minimum wage unless the employing organization itself is part of the state government or a political subdivision thereof.

    Summary

    The Faculty Student Association of the State University of Oneonta, a non-profit, was ordered to pay back wages to its non-student employees. The Association appealed, arguing it was exempt from minimum wage laws as an appendage of the State University. The Industrial Board of Appeals agreed, but the Court of Appeals reversed. The court held that the statute exempts employees only when the *employing* organization is the state government or its subdivision. The Association, though affiliated with the State University, did not qualify for the exemption, and therefore its non-student employees were entitled to minimum wage.

    Facts

    The Faculty Student Association of the State University of Oneonta, Inc. is a non-profit corporation. Its purpose is to promote educational and social relations among students and faculty. The Industrial Commissioner ordered the Association to pay $355.76 in underpayment to 21 non-student employees for failure to pay minimum wage.

    Procedural History

    The Faculty Student Association appealed the Industrial Commissioner’s order to the Industrial Board of Appeals. The Board revoked the Commissioner’s order, finding the Association exempt from minimum wage requirements. The Appellate Division affirmed, holding the Board’s decision was reasonable. The Court of Appeals reversed the Appellate Division’s order.

    Issue(s)

    Whether non-student employees of the Faculty Student Association of the State University of Oneonta, Inc., a non-profit organization, are entitled to the payment of minimum wage under Article 19 of the Labor Law.

    Holding

    Yes, because the statutory exemption from minimum wage requirements applies only to individuals employed by the state government or a political subdivision thereof, and the Faculty Student Association, while affiliated with the State University, does not meet that criteria.

    Court’s Reasoning

    The Minimum Wage Act requires every employer to pay employees at least the minimum wage. The term “employee” includes any individual employed by an employer, with some exceptions. The Association argued it fell under the exception for individuals employed by a state government or political subdivision. The Court disagreed, stating that the “clear language of the statutory exemption precludes its application to petitioner’s employees.” Even if the college itself is considered part of state government, the Association is not. Therefore, its employees are entitled to minimum wage. The Court distinguished Matter of Beth Israel Hosp. Housing Co. (Catherwood), noting that the exemption in that case was based on the purpose of the organization, whereas in the present case, the exemption is based on the nature of the employing organization. The court stated, “since it is not the State government or a political subdivision thereof, its employees do not come within the exception, and therefore are entitled to the minimum wage.” The court also distinguished real property tax exemption cases because those statutes focus on the purpose for which the organization is conducted. The Court concluded that the order of the Appellate Division should be reversed and the order of the Industrial Commissioner reinstated.