Employers should review minimum wages for their employees to determine whether changes will need to be made to the compensation structure.

On April 4, 2016, New York Governor Andrew Cuomo signed legislation enacting a statewide $15 minimum wage plan. 

$15 Minimum Wage Plan

The minimum wage plan will be implemented on a staggered basis, ultimately reaching $15 per hour, for all workers in all industries across New York State. 

• New York City employers with 11 or more employees:
  • $11.00 per hour, effective December 31, 2016
  • $13.00 per hour, effective December 31, 2017
  • $15.00 per hour, effective December 31, 2018 

• New York City employers with 10 employees or less:
  • $10.50 per hour, effective December 31, 2016
  • $12.00 per hour, effective December 31, 2017
  • $13.50 per hour, effective December 31, 2018
  • $15.00 per hour, effective December 31, 2019 

• Employees in Nassau, Suffolk and Westchester Counties:
  • $11.00 per hour, effective December 31, 2017
  • $12.00 per hour, effective December 31, 2018
  • $13.00 per hour, effective December 31, 2019
  • $14.00 per hour, effective December 31, 2020
  • $15.00 per hour, effective December 31, 2021 

• Employees in the rest of the state:
  • $9.70 per hour, effective December 31, 2016
  • $10.40 per hour, effective December 31, 2017
  • $11.10 per hour, effective December 31, 2018
  • $11.80 per hour, effective December 31, 2019
  • $12.50 per hour, effective December 31, 2020
  • To be determined, effective December 31, 2021, and each succeeding December 31, as the minimum wage will continue to increase by a percentage determined by the Director of the Division of Budget (“DOB”) in consultation with the New York State Department of Labor until it reaches $15 per hour. 

Tipped Employees: As of December 31, 2015, the minimum cash wage for tipped workers in the hospitality industry (including food service industry employees, service employees and tipped employees in resort hotels) is $7.50 per hour if they earn at least $1.50 in tips. For all other tipped workers (except building service), the minimum cash wage is $7.65 per hour if they earn at least $1.35 per hour in tips, or $6.80 per hour if they earn at least $2.20 per hour in tips. Under the new Minimum Wage Plan, the minimum cash wage for tipped employees is two-thirds of the applicable minimum wage then in effect, rounded to the nearest five cents, or $7.50, whichever is higher. For example, on December 31, 2017, tipped employees working for New York City employers with 11 or more employees must be paid a minimum cash wage of $8.70 (two-thirds of $13.00), provided tips average at least $4.30 an hour. 

Potential Suspension If Economic Downturn: Beginning in 2019, the state DOB Director will conduct an annual analysis of the economy in each region and the effect of the minimum wage increases statewide to determine whether a temporary suspension of the scheduled increases is necessary. 

What This Means for New York Employers

Employers should review minimum wages for their employees to determine whether changes will need to be made to the compensation structure. Employers may want to prepare their payroll service providers and payroll personnel to take appropriate steps to ensure the minimum wage increases are implemented properly. 

For Further Information

If you have any questions about this Alert, please contact any of the attorneys in our Employment, Labor, Benefits and Immigration Practice Group or the attorney in the firm with whom you are regularly in contact.

Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.