Key Points

Standard Rates Unchanged. New York's general minimum wage will remain at $17.00 per hour in New York City, Long Island and Westchester County, and $16.00 per hour in the rest of the state.
Home Care Aides Are the Exception. The minimum wage for home care aides will increase on Jan. 1, 2027, to $20.00 per hour downstate and $19.00 per hour in the rest of the state.
Possible March 1 Increase. Gov. Hochul has proposed a change to the law that, if the Legislature approves it, would raise the minimum wage to $17.60 and $16.55 per hour, respectively, effective March 1, 2027.

Background

As we reported last year, on Jan. 1, 2026, New York's minimum wage increased to $17.00 per hour for downstate (i.e., New York City, Long Island and Westchester County) employees and $16.00 per hour for upstate employees. Starting in 2027, New York law mandates that the minimum wage will increase annually if there are corresponding increases to the three-year moving average of the Consumer Price Index for Urban Wage Earners and Clerical Workers for the Northeast Region.

However, the New York law also states that when certain contingencies are met, there will be a pause in the annual increase to the minimum wage. Such contingencies are when: (1) the prior year’s consumer price index is negative, (2) the state’s unemployment rate rises by 0.5% or more, or (3) the state’s total non-farm employment in July is lower than it was in both January and April.

If there is an increase to the minimum wage, it is effective on Jan. 1 of any given year, and the New York State Department of Labor (NYSDOL) must post the adjusted rate by Oct. 1.

For Hospitality and Miscellaneous Industries: No Increase for January 2027

This October, the NYSDOL announced that New York’s non-farm employment numbers were lower in July than in January and April. Accordingly, the general minimum wage will not increase on Jan. 1, 2027. For most employers, the rates for 2027 will remain as follows:

• $17.00 per hour in New York City, Long Island, and Westchester County.
• $16.00 per hour in the rest of New York State.

Because the general minimum wage remains unchanged for now, the cash wage and tip credit for tipped food service workers in the hospitality industry also remain the same:

• $11.35 cash wage and $5.65 tip credit in New York City, Long Island and Westchester County.
• $10.70 cash wage and $5.30 tip credit in the rest of New York State.

March 2027

Gov. Kathy Hochul has proposed amending New York law so that the minimum wage will increase. Under the current law, when the non-farm employment numbers are lower in July than they were in April and January, there will be a freeze on minimum wage increases. The governor’s proposal would amend this contingency so that the minimum wage will freeze only when non-farm employment in July has decreased by more than a 0.25% per month threshold. If the state Legislature approves the change, the following rates would take effect on March 1, 2027:

• $17.60 per hour in New York City, Long Island and Westchester County.
• $16.55 per hour in the rest of New York State.

No bill implementing this proposal has been introduced or sponsored in either the Senate or the Assembly. As such, the Legislature is not expected to consider the proposal until it reconvenes in January 2027.

The proposal does not address the cash wage or tip credit for food service workers, and no proposed tipped rates have been announced. However, the NYSDOL is required to amend the Hospitality Industry Wage Order to increase these amounts in proportion to any new minimum wage. Tipped rates under this proposal will not be known until the NYSDOL publishes the amended wage order.

Home Care Aides Are the Exception

Home care aides are the exception to this year's minimum wage freeze. The minimum wage for such employees will increase on Jan. 1, 2027, to $20.00 per hour in New York City, Long Island and Westchester County, and to $19.00 per hour in the rest of the state.

If Hochul’s proposal is passed, on March 1, 2027, the minimum wage rates for home care aides will increase further to $20.30 per hour in New York City, Long Island and Westchester County, and to $19.30 per hour in the rest of New York State.

Practical Implications and Next Steps

Employers should confirm that their payroll systems accurately reflect the current wage rates and that they will not apply an automatic increase on Jan 1, 2027. Employers should be prepared for a potential change on March 1, 2027, and plan ahead to change rates and issue new rate of pay forms should wages increase. If the minimum wage increases in March, employers will need to make all applicable changes to rate of pay notices; tip pool or tip sharing agreements; and handbooks.

For more information, contact Ryan W. Lee at rwlee@foxrothschild.com, Carolyn D. Richmond at crichmond@foxrothschild.com, Glenn S. Grindlinger at ggrindlinger@foxrothschild.com, or another member of Fox Rothschild’s Labor & Employment Department.

This information is intended to inform firm clients and friends about legal developments, including the decisions of courts and administrative bodies. Nothing in this alert should be construed as legal advice or a legal opinion. Readers should not act upon the information contained in this alert without seeking the advice of legal counsel. Views expressed are those of the authors and not necessarily this law firm or its clients.