Category: Minimum Wage

May 4, 2023

Future New York Minimum Wage Increases Planned

Changes to New York’s minimum wage rates have been a hot topic during a contentious 2024 state budgeting process. With a budget deal now in place in Albany, Governor Kathy Hochul has announced future New York minimum wages beginning in 2024. The increases are not as high as some were proposing, which could have made New York’s minimum wage the highest of any state in the country.

Regional Distinctions

After some discussion of moving back to a uniform minimum wage across the entire state, future New York minimum wage rates will continue to vary geographically. In 2023, the minimum wage for New York City, Long Island (Nassau and Suffolk Counties), and Westchester County is $15 per hour. For the rest of the state, it is $14.20. (Note: Certain fast food employers are subject to a statewide $15 minimum wage.)

On January 1, 2024, the New York City-area jurisdictions will increase to a $16 minimum wage, and the rest of the state will move to $15.

These rates will increase again by $0.50 in both 2025 and 2026. Thus, the 2024-2026 New York minimum wage rates will be:

	2024	2025	2026
NYC, Long Island, Westchester	$16.00	$16.50	$17.00
Rest of NYS	$15.00	$15.50	$16.00

2027 and Beyond

After 2026, future New York minimum wage increases will occur based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) for the Northeast Region. In other words, the minimum wage will be indexed to inflation. It appears that the NYC, Long Island, and Westchester minimum wage would always remain higher than the rest of the state since they’re all tied to the same index.

The New York State Department of Labor is expected to publish the new minimum wage for the subsequent year annually by October 1st.

Despite the indexing, the minimum wage rates would not change if:

The CPI-W is negative;
The statewide unemployment rate increases by 0.5% or more during applicable periods; or
Total non-farm employment decreases (measured seasonally).

Overtime Exemption Thresholds

Higher minimum wage rates will also produce higher salary requirements to maintain the administrative and executive exceptions to New York’s overtime requirements. The increases in the salary thresholds should correspond to the same percentage increases in the applicable minimum wage. Accordingly, the anticipated salary thresholds through 2026 are shown below.

	2024	2025	2026
NYC, Long Island, Westchester	$1,200.00	$1,237.50	$1,275.00
Rest of NYS	$1,124.20	$1,161.70	$1,199.15

Other Affected Rates

Other wage rates contained in New York’s minimum wage orders would also increase with the higher future New York minimum wage. For example, the tip allowance for restaurant and hotel employees would be expected to increase (as would the amount that service employees must receive in direct wages from their employers).

Plan Ahead

Although some employers will struggle with the higher minimum wage rates, the 2024 budget resolution at least provides some certainty on this issue for the foreseeable future. Plus, the increases are well below the $21.00+ per hour minimums that some legislators sought. Although these rates could be changed by future legislative action, employers can now better project their labor costs through 2026, including where wage rates must be negotiated and potentially set for years in advance in unionized workplaces.

October 6, 2022

2023 New York Minimum Wage

Do you know the 2023 New York minimum wage? Actually, there are different minimum wages for different parts of the state and different industries. Employers must be ready before the end of the year to meet the new requirements that apply to their employees.

The 2023 New York minimum wage rates are shaded in blue in the tables below. Note that the changes take effect on the last day of the year, not January 1st.

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Standard New York Minimum Wage

The 2023 New York minimum wage varies by geographic location and sometimes by industry.

For most private employers, the 2023 New York minimum wage in the following chart applies. This chart also applies for non-teaching employees of public school districts or a BOCES. However, there is no New York minimum wage for other employees of public (governmental) employers (but the federal minimum wage of $7.25 does apply).

**General Minimum Wage Rate Schedule**
Location	12/31/21	12/31/22
NYC – Large Employers (of 11 or more)	$15.00	$15.00
NYC – Small Employers (10 or less)	$15.00	$15.00
Long Island & Westchester	$15.00	$15.00
Remainder of New York State	$13.20	$14.20

* Annual increases for Upstate New York will continue until the rate reaches a $15 minimum wage. The annual increases will be published by the Commissioner of Labor by October 1. They will be based on percentage increases determined by the Director of the Division of Budget, based on economic indices, including the Consumer Price Index. The report on the December 31, 2023 increase is available here.

Minimum Wage for Tipped Employees in the Hospitality Industry

New York State has separate minimum wage rules for employees in the hospitality industry. These rules apply to businesses running a restaurant or hotel.

The minimum wage rates for most non-tipped employees in the hospitality industry are set as per the schedule above. However, employers may count a portion of certain tipped employees’ gratuities toward the minimum wage requirements. This is known as a “tip credit.”

New York State has two separate cash wage and tip credit schedules for tipped hospitality employees who qualify as “food service workers” and “service employees.”

Food Service Workers

A food service worker is any employee who is primarily engaged in serving food or beverages to guests, patrons, or customers in the hospitality industry who regularly receive tips. This includes wait staff, bartenders, captains, and busing personnel. It does not include delivery workers.

**Hospitality Industry Tipped Minimum Wage Rate Schedule (Food Service Workers)**
Location	12/31/21	12/31/22
NYC – Large Employers (of 11 or more)	$10.00 Cash $5.00 Tip	$10.00 Cash $5.00 Tip
NYC – Small Employers (10 or less)	$10.00 Cash $5.00 Tip	$10.00 Cash $5.00 Tip
Long Island & Westchester	$10.00 Cash $5.00 Tip	$10.00 Cash $5.00 Tip
Remainder of New York State	$8.80 Cash $4.40 Tip	$9.45 Cash $4.75 Tip

Service Employees

The next schedule applies to other service employees. A service employee is one who is not a food service worker or fast food employee who customarily receives tips above an applicable tip threshold (which also follows schedules, not shown here).

**Hospitality Industry Tipped Minimum Wage Rate Schedule (Service Employees)**
Location	12/31/21	12/31/22
NYC – Large Employers (of 11 or more)	$12.50 Cash $2.50 Tip	$12.50 Cash $2.50 Tip
NYC – Small Employers (10 or less)	$12.50 Cash $2.50 Tip	$12.50 Cash $2.50 Tip
Long Island & Westchester	$12.50 Cash $2.50 Tip	$12.50 Cash $2.50 Tip
Remainder of New York State	$11.00 Cash $2.20 Tip	$11.85 Cash $2.35 Tip

Fast Food Minimum Wage

Non-exempt employees at some “fast food” restaurants are subject to an alternative minimum wage schedule.

This schedule applies to employees who work in covered fast food restaurants whose job duties include at least one of the following: customer service, cooking, food or drink preparation, delivery, security, stocking supplies or equipment, cleaning, or routine maintenance.

These special New York minimum wage rates only apply to fast food restaurants that are part of a chain with at least 30 restaurants nationally.

As of July 1, 2021, the minimum wage for fast food workers throughout the state is $15.00 per hour. No further increases are currently scheduled.

Note: No tip credit is available for fast food employees.

Overtime Threshold

Along with increases to the 2023 New York minimum wage, the salary requirement to maintain some overtime exemptions will also increase.

The salary threshold for New York’s executive and administrative exemptions go up on December 31st. These amounts are all higher than the federal Fair Labor Standards Act (FLSA) threshold of $684/week. But most New York employers (other than governmental entities) must satisfy the higher New York threshold to ensure full overtime exemption.

There is no salary requirement for New York’s professional exemption. But employers must also satisfy the FLSA threshold for most professional employees. Doctors, lawyers, and teachers do not have a salary requirement for exemption.

**Executive & Administrative Exemption Weekly Salary Threshold Schedule**
Location	12/31/21	12/31/22
NYC – Large Employers (of 11 or more)	$1,125.00	$1,125.00
NYC – Small Employers (10 or less)	$1,125.00	$1,125.00
Long Island & Westchester	$1,125.00	$1,125.00
Remainder of New York State	$990.00	$1,064.25

Prepare Now for the 2023 New York Minimum Wage

New York employers should review their compensation levels and make necessary changes by December 31, 2022. Updates might result in increasing an employee’s hourly wage or salary or reclassifying exempt employees to non-exempt if they will no longer meet the exemption salary requirement.

And, remember, the 2023 New York minimum wage rates only last one year in some cases. Companies will have to review this again next year (or sooner).

To keep up on New York and federal wage and hour requirements and other employment law topics, you can sign up for our email newsletter here or follow us on LinkedIn!

September 29, 2022

New York Call-In Pay Requirements

Employees who don’t work a full shift might be entitled to additional pay beyond their clocked hours. New York law addresses this complicated topic as “call-in pay.” The legal requirements vary based on industry, and for many employees being eligible for “call-in pay” won’t result in additional income.

Hospitality Industry Call-In Pay

A special set of wage rules covers New York employees working in the hospitality industry. These requirements generally apply to any employee working in a restaurant or hotel.

Hospitality employees exempt from minimum wage and overtime are not eligible for call-in pay, unless offered by their employer beyond what the law requires.

Non-exempt restaurant and hotel employees who report to work (whether scheduled or called in) must receive at least their “applicable wage rate” for at least:

3 hours for one shift, or the number of hours in the regularly scheduled shift, whichever is less;
6 hours for two shifts totaling six hours or less, or the number of hours in the regularly scheduled shift, whichever is less; and
8 hours for three shifts totaling eight hours or less, or the number of hours in the regularly scheduled shift, whichever is less.

An employee’s “applicable wage rate” for time actually in attendance at work is either the regular or overtime rate of pay minus any “customary and usual” tip credit. For the remaining time owed under the call-in pay provision, the applicable wage rate is the basic hourly minimum wage with no tip credit subtracted.

A “regularly scheduled shift” is a “fixed, repeating shift that an employee normally works on the same day of each week.” Employees whose schedule varies have no regularly scheduled shift.

Call-In Pay for Other Employees

For most other private-sector (non-government) employees, call-in pay is addressed in the New York “Minimum Wage Order for Miscellaneous Industries and Occupations.” Again, the call-in pay provision doesn’t apply to employees exempt from minimum wage and overtime under state law.

For non-exempt employees, the wage order provides that:

“An employee who by request or permission of the employer reports for work on any day shall be paid for at least four hours, or the number of hours in the regularly scheduled shift, whichever is less, at the basic minimum hourly wage.”

However, this doesn’t mean that an employee who works less than 4 hours will necessarily receive additional pay beyond their hours worked.

Confusingly, the provision is interpreted relative to overall compensation for a workweek. If total pay for the week exceeds minimum wage for the hours actually worked plus the extra hours attributable to the call-in pay provision, then no additional pay is required by the wage order.

Take, for example, an employee who works 6 hours each day Monday through Thursday, but is sent home after only 2 hours on Friday. If the employee’s wage rate is exactly minimum wage, then the call-in pay provision would entitle them to 2 additional hours of pay. But if their regular pay rate exceeds minimum wage enough that their total base pay for the week is more than 28 times the minimum wage (26 hours worked plus the 2 hours “due” for on-call pay), then the call-in pay does not require additional compensation.

Agreed Upon Call-In Pay

The above provisions are the legal defaults under New York State law, but employers may agree to pay more than is required either on an individual basis, by policy, or under a union contract. Once a company says it will pay call-in pay differently, it must do so. Any changes, if contractually permitted, would need to be made prospectively (i.e., for future pay periods after the change in compensation practices is announced).

New York City Fair Workweek Law

The New York City Fair Workweek Law provides certain scheduling protections to covered fast food and retail workers within NYC. In some cases, this local law would prohibit employers from calling in employees on short notice or require additional compensation beyond the statewide call-in pay requirements.

Review Your Call-In Pay Procedures

If you are responsible for setting, reviewing, or paying the compensation of non-exempt employees in New York, you should double-check your company’s call-in pay rules, if any. Voluntarily paying more than required usually isn’t a legal problem; not paying enough certainly could be. Underpaying wages due can result in significant penalties beyond compensating employees for lost pay.

To keep up on New York wage and hour requirements and other employment law topics, sign up for our email newsletter here or follow us on LinkedIn!