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.
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