Executive Summary
Overview: New York Governor, Andrew Cuomo, signed legislation implementing a staggered set of regional minimum wage increases with the end goal of increasing the state’s minimum wage to $15.00 an hour by 2021.
Effective Date: Commencing December 31, 2016, and continuing each year until 2021.
Coverage: All employers with employees working in New York.
Action Required: Contact your Human Resources Business Partner if you have any questions regarding this update.
The Details
The new legislation gradually raises the minimum wage to $15.00 an hour under different schedules in three state regions. The regions are: (1) New York City; (2) “downstate,” which includes Nassau, Suffolk and Westchester counties; and (3) “upstate,” i.e. the remainder of New York State. It also establishes a different schedule of increases for employers with 10 or fewer employees. The schedule is as follows:
|
Effective Date
|
Workers Employed in New York City by Employer with 11 or More Employees
|
Workers Employed in New York City by Employer with 10 or Fewer Employees
|
Workers Employed in Downstate New York
|
Workers Employed in Upstate New York
|
|
December 31, 2016
|
$11.00 per hour
|
$10.50
|
$10.00
|
$9.70
|
|
December 31, 2017
|
$13.00 per hour
|
$12.00
|
$11.00
|
$10.40
|
|
December 31, 2018
|
$15.00 per hour
|
$13.50
|
$12.00
|
$11.10
|
|
December 31, 2019
|
$15.00 per hour
|
$15.00
|
$13.00
|
$11.80
|
|
December 31, 2020
|
$15.00 per hour
|
$15.00
|
$14.00
|
$12.50
|
|
December 31, 2021
|
$15.00 per hour
|
$15.00
|
$15.00
|
To be determined
|
The new minimum wage for tipped food service employees is two thirds of the applicable minimum wage, rounded to the nearest five cents or $7.50, whichever is higher. Unless the New York Department of Labor issues a revised order, the minimum cash wage for tipped food service employees prior to their receipt of tips will increase as follows:
|
Effective Date
|
Workers Employed in New York City by Employer with 11 or More Employees
|
Workers Employed in New York City by Employer with 10 or Fewer Employees
|
Workers Employed in Downstate New York
|
Workers Employed in Upstate New York
|
|
December 31, 2016
|
$7.50
Tip credit: $3.50
Total: $11.00
|
$7.50
Tip credit: $3.00
Total: $10.50
|
$7.50
Tip credit: $2.50
Total: $10.00
|
$7.50
Tip credit: $2.20
Total: $9.70
|
|
December 31, 2017
|
$8.70
Tip credit: $4.30
Total: $13.00
|
$8.00
Tip credit: $4.00
Total: $12.00
|
$7.50
Tip credit: $3.50
$11.00
|
$7.50
Tip credit $2.90
Total: $10.40
|
|
December 31, 2018
|
$10.00
Tip credit: $5.00
Total: $15.00
|
$9.00
Tip credit: $4.50
Total: $13.50
|
$8.00
Tip credit: $4.00
$12.00
|
$7.50
Tip credit $3.60
Total: $11.10
|
|
December 31, 2019
|
$10.00
Tip credit: $5.00
Total: $15.00
|
$10.00
Tip credit: $5.00
Total: $15.00
|
$8.70
Tip credit: $4.30
$13.00
|
$7.85
Tip credit: $3.95
$11.80
|
|
December 31, 2020
|
$10.00
Tip credit: $5.00
Total: $15.00
|
$10.00
Tip credit: $5.00
Total: $15.00
|
$9.35
Tip credit: $4.65
Total: $14.00
|
$8.35
Tip credit: $4.15
Total: $12.50
|
|
December 31, 2021
|
$10.00
Tip credit: $5.00
Total: $15.00
|
$10.00
Tip credit: $5.00
Total: $15.00
|
$10.00
Tip credit: $5.00
Total: $15.00
|
To be determined
|
By 2021, the minimum cash base wages for tipped food service workers will reach $10.00 per hour in New York City and Downstate, with a $5.00 per hour tip allowance permitted, provided tips average at least $5.00 per hour, to reach a total minimum wage of $15.00 per hour. Minimum cash wages for the rest of the state would be $8.35 per hour with a $4.15 per hour tip allowance, for a total minimum wage of $12.50, pending the results of the Division of Budget’s analysis of the effects of the minimum wage increases.
Workers in “fast food establishments” began a phased-in schedule of minimum wages on December 31, 2015. The schedule was unaffected by the new minimum wage legislation.
Note: A “fast food establishment” is defined as any business that 1) primarily serves food or drinks, including coffee shops, juice bars, donut shops and ice cream parlors; 2) offers limited service where customers order and pay before eating, including restaurants with tables but without full table service, or that provide takeout service; and 3) is part of a chain of 30 or more locations, including individually owned establishments associated with a brand with 30 or more locations nationally.
The minimum wages for fast food workers, which are currently at $10.50 for workers in New York City and $9.75 for workers in the rest of the state, will increase as follows:
|
Effective Date
|
New York City
|
Remaining Areas
Outside New York City
|
|
December 31, 2015
|
$10.50
|
$9.75
|
|
December 31, 2016
|
$12.00
|
$10.75
|
|
December 31, 2017
|
$13.50
|
$11.75
|
|
December 31, 2018
|
$15.00
|
$12.75
|
|
December 31, 2019
|
$15.00
|
$13.75
|
|
December 31, 2020
|
$15.00
|
$14.50
|
|
July 1, 2021
|
$15.00
|
$15.00
|
In 2019, the Director of the Division of Budget is slated to conduct an analysis of the economy and the effect the increased minimum wage will have. At that time, a determination will be made as to whether a temporary suspension of the scheduled increases is necessary.
As always, please contact your Human Resources Business Partner if you have any questions.