On April 4, 2016, New York Governor Andrew M. Cuomo signed into law a state budget for the 2016-2017 fiscal year, N.Y. State Senate Bill No. S06406C, N.Y. State Assembly Bill No. A09006C (“the Act” or “the new law”).  The Act includes a provision, Part K, which, over a period of three to six years — depending on the county and the size of the employer — raises New York State’s minimum wage from $9.00 per hour to $15.00 per hour.

This is the first law increasing New York’s minimum wage for all workers since March 2013, when Governor Cuomo signed into law a state budget which, over a period of three years, raised New York’s minimum wage from $7.25 per hour to $9.00 per hour.  (In September 2015, acting New York State Commissioner of Labor (the “State Commissioner of Labor”) signed a wage order which, over a period of three to six years — depending on the county — increased New York State’s minimum wage for fast food workers from $8.75 per hour to $15.00 per hour.)

Hourly Minimum Wage

Specifically, Part K of the Act amends the New York State Minimum Wage Act, N.Y. Labor Law § 652, to provide that New York City’s hourly minimum wage applying to employers with eleven or more employees will increase to:

  • $11.00 on and after December 31, 2016;
  • $13.00 on and after December 31, 2017; and
  • $15.00 on and after December 31, 2018.

Under the new law, New York City’s hourly minimum wage governing employers with ten or fewer employees will rise to:

  • $10.50 on and after December 31, 2016;
  • $12.00 on and after December 31, 2017;
  • $13.50 on and after December 31, 2018; and
  • $15.00 on and after December 31, 2019.

Pursuant to the Act, the hourly minimum wage applying to employers in Nassau, Suffolk and Westchester Counties will increase to:

  • $10.00 on and after December 31, 2016;
  • $11.00 on and after December 31, 2017;
  • $12.00 on and after December 31, 2018;
  • $13.00 on and after December 31, 2019;
  • $14.00 on and after December 31, 2020; and
  • $15.00 on and after December 31, 2021.

As per the new law, the hourly minimum wage governing employers in New York State, but outside of New York City and outside of Nassau, Suffolk and Westchester Counties, will rise to:

  • $9.70 on and after December 31, 2016;
  • $10.40 on and after December 31, 2017;
  • $11.10 on and after December 31, 2018;
  • $11.80 on and after December 31, 2019; and
  • $12.50 on and after December 31, 2020.

Also with respect to employers in New York State, but outside of New York City and outside of Nassau, Suffolk and Westchester Counties, the Act provides that, on and after December 31, 2021 and on December 31 of each year after 2021, the hourly minimum wage will increase by a percentage to be determined by the Director of the New York State Division of Budget in consultation with the State Commissioner of Labor, until the hourly minimum wage with respect to such employers reaches $15.00 per hour.

According to the Governor’s office, an estimated 2,300,000 workers will benefit from the new law’s increases in the minimum wage.

Food Service Workers

As of December 31, 2015, food service workers in the restaurant or hotel industries in New York, other than fast food workers, were entitled to receive a minimum base wage of $7.50 per hour, and credit for tips could not exceed $1.50 per hour, provided that the total of tips received plus the base wages equaled or exceeded $9.00 per hour.  12 N.Y.C.R.R. § 146-1.3(b)(4).  Under the new law, the minimum base wage for food service workers in the hotel or restaurant industries in New York, other than fast food workers, is two-thirds of the minimum wage then in effect, rounded to the nearest five cents, or $7.50 per hour, whichever is higher.

For instance, from December 31, 2017 through December 30, 2018, food service workers, other than fast food workers, employed by hotels or restaurants in New York City with ten or fewer employees must be paid a minimum base wage of $8.00 per hour (two-thirds of $12.00), provided their tips average at least $4.00 per hour.

Safety Valve

Beginning in 2019, and until the hourly minimum wage reaches $15.00 per hour in all areas of the State, the New York State Division of Budget (the “State Division of Budget”) will conduct a yearly analysis of the economy in each region and the effect of the Act’s minimum wage increases to determine whether there should be a temporary suspension or delay in any scheduled increases.  The State Division of Budget will issue a report and recommendation to the State Commissioner of Labor, who will take action on that report and recommendation.

Nationwide Trend

Also in April 2016, the State of California enacted a law which, by periodic increases, will raise the Golden State’s minimum wage to $15.00 per hour by 2022.

Likewise, since 2013, at least five U.S. cities, including Los Angeles, Seattle, and San Francisco, and the California cities of Emeryville and Mountain View, have approved a minimum wage for all workers in those localities which, in staggered increases, has reached or will reach $15.00 per hour.

With the Act, New York State joins California as one of the two states to approve, in stages (or, for that matter, to set immediately) a minimum wage as high as $15.00 per hour.

Take-Aways for Employers

Employers in New York State should review the wages they pay their workers, and the Act’s staggered schedule of increases in the hourly minimum wage, to ascertain whether, and if so when, the employers must raise salaries or hourly rates to comply with the new law.

Call the Law Offices of David S. Rich, LLC at (212) 209-3972 to speak with a knowledgeable labor and employment lawyer about ensuring that your company complies with overtime pay and other wage and hour laws, or to retain a skilled overtime attorney to defend your company in unpaid overtime lawsuits or other wage and hour litigation.

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