Amendment To Worker’s Compensation Law Raises Minimum Wage and Provides Paid Family Leave: Part 1, The Minimum Wage

On April 4, 2016, Governor Andrew Cuomo signed into law the 2016-2017 budget.  As part of this agreement, New York will gradually raise the minimum wage to $15 an hour, and provide workers with 12 weeks of paid family leave effective January 1, 2018.  

Minimum Wage

The “Fight for Fifteen” has been a prominent movement in New York, starting first with the fast food industry in New York City and spreading to calls for a statewide minimum wage of $15. Under this budget agreement, that will become a reality for all of New York’s employees, beginning as early as December 31, 2018.

While the budget agreement envisions a $15 minimum wage, the law uses several different schedules for minimum wage increases to accommodate the needs of both small and large employers, and to account for the disparities between New York City, Long Island, and upstate New York State.  The fastest increase is for New York City employers with 11 or more employees, who will be required to pay at least $15 an hour on December 31, 2018.  In contrast, NYC employers with 10 or less employees have until December 31, 2019, with correspondingly smaller increases in the intervening years. For Nassau, Suffolk, and Westchester counties, the minimum wage for all employees will be $10 an hour on December 31, 2016, and rise by $1 every year until reaching $15 an hour on December 31, 2021.

The slowest schedule applies to upstate New York.  These counties will see the minimum wage rise to $12.50 an hour by 2020, with annual increases thereafter determined by the Director of the Division of Budget and Department of Labor until the minimum wage reaches $15 an hour.  In addition, starting in 2019 the State will conduct annual region-by-region analyses of the economy and the impact of the minimum wage increases, with the option of temporarily suspending scheduled increases if necessary.  Finally, these increases may also be preempted by any changes in the federal minimum wage.

Employers should note that the applicable minimum wage is based on where the work occurs, not where the employer is headquartered. In addition, not-for-profits and other non-corporate employers are subject to the same requirements as for-profit enterprises.  Overall, this will impact 2.3 million workers statewide, and your business should start planning now for the costs this will entail.

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