New York Increases the Minimum Wage for the Eighth Time Since 2013

April 6, 2016Alerts Labor & Employment Alert

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As part of the 2016-2017 budget deal, the New York legislature and Governor Cuomo agreed to increase the minimum wage yet again. In fact, the minimum wage will increase to $15.00 per hour in New York City for most employers by the end of 2018. This will be the eighth time that the minimum wage in New York has increased since 2013.

The budget deal creates a three tier wage system in New York:

  • one tier for New York City
  • a second tier for Nassau, Suffolk and Westchester counties
  • a third tier for the rest of the State

The New York City tier also has two sub-tiers – one for “large” employers and one for “small” employers. A “large employer” is defined under this law as any employer that has more than 10 employees. In addition, the tip credit is also changing as a result of the budget deal; employers will now have to pay a cash wage to tipped workers that is at least 2/3 of the full minimum wage, rounded up to the nearest $0.05. Accordingly, under the budget deal, the minimum wage in New York will increase as follows:

New York City

Employers with more than 10 Employees

Effective

Dec. 31, 2016

Effective

Dec. 31, 2017

Effective

Dec. 31, 2018

Minimum Wage

$11.00

$13.00

$15.00

Minimum Overtime Rate

$16.50

$19.50

$22.50

Cash Wage to Tipped Employees

$7.50

$8.70

$10.00

Overtime Wage to Tipped Employees

$13.00

$15.20

$17.50

Tip Credit

$3.50

$4.30

$5.00


Employers with 10 or fewer Employees

Effective
Dec. 31, 2016

Effective
Dec. 31, 2017

Effective
Dec. 31, 2018

Effective
Dec. 31, 2019

Minimum Wage

$10.50

$12.00

$13.50

$15.00

Minimum Overtime Rate

$15.75

$18.00

$20.25

$22.50

Cash Wage to Tipped Employees

$7.50

$8.00

$9.00

$10.00

Overtime Wage to Tipped Employees

$12.75

$14.00

$15.75

$17.50

Tip Credit

$3.00

$4.00

$4.50

$5.00


Nassau, Suffolk & Westchester Counties

Effective
Dec. 31, 2016

Effective
Dec. 31, 2017

Effective
Dec. 31, 2018

Effective
Dec. 31, 2019

Effective
Dec. 31, 2020

Effective
Dec. 31, 2021

Minimum Wage

$10.00

$11.00

$12.00

$13.00

$14.00

15.00

Minimum Overtime Rate

$15.00

$16.50

$18.00

$19.50

$21.00

$22.50

Cash Wage to Tipped Employees

$7.50

$7.50

$8.00

$8.70

$9.35

$10.00

Overtime Wage to Tipped Employees

$12.50

$13.00

$14.00

$15.20

$16.35

$17.50

Tip Credit

$2.50

$3.50

$4.00

$4.30

$4.65

$5.00


Rest of New York State

Effective
Dec. 31, 2016

Effective
Dec. 31, 2017

Effective
Dec. 31, 2018

Effective
Dec. 31, 2019

Effective
Dec. 31, 2020

Minimum Wage

$9.70

$10.40

$11.10

$11.80

$12.50

Minimum Overtime Rate

$14.55

$15.60

$16.65

$17.70

$18.75

Cash Wage to Tipped Employees

$7.50

$7.50

$7.50

$7.90

$8.35

Overtime Wage to Tipped Employees

$12.35

$12.70

$13.05

$13.80

$14.60

Tip Credit

$2.20

$2.90

$3.60

$3.90

$4.15


Further, under the terms of the budget deal, the Commissioner of Labor is forbidden from convening a wage board that increases the minimum wage for any person in New York at a rate faster than as set forth above. In addition, as a result of the above increases to the minimum wage, spread of hours payments, paid sick leave payments, call-in pay and other ancillary payments will increase accordingly.

This is certainly unwelcome news for the thousands of New York businesses that are struggling with all of the mandates and wage increases that have been levied against business. For New York City employers, by the end of 2018, the minimum wage will have increased nearly 100% in less than five years. New York employers must remain vigilant in complying with New York wage and hour laws lest they have to pay penalties and fines on top of the labor costs that they will be required to endure.

For more information about this alert, please contact Carolyn D. Richmond at [email protected] or 212.878.7983, Glenn S. Grindlinger at [email protected] or 212.905.2305 or any member of Fox Rothschild’s New York Labor & Employment Department.