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.
This content provides practical information concerning the subject matter covered and is provided with the understanding that ADP is not rendering legal advice.