New York is officially on the $15 minimum wage bandwagon. Last week, Governor Andrew Cuomo announced that the state’s minimum wage will increase from $9 to $15 by as early as 2018. Additionally, the state has enacted a paid family leave program, which will be funded by payroll deductions. The legislation was part of an agreement between the Governor and state legislative leaders concerning the state’s budget. Gov. Cuomo signed the bill into law on Monday, April 4, 2016.
Unlike California’s recent statewide minimum wage increase (which we covered last week here), New York’s law will be implemented on a region-by-region basis.
New York City businesses with at least 11 workers must pay a minimum wage of $11 per hour by the end of the year, with $2 increases in each subsequent year to reach $15 by the end of 2018. New York City businesses with 10 or fewer workers will be subject to a more gradual schedule – the minimum wage will increase to $10.50 by the end of 2016, with $1.50 increases in each following year until 2019.
In Nassau, Suffolk, and Westchester counties, the minimum wage will raise to $10 at the end of 2016, with $1 increases in each subsequent year until 2021.
Throughout the rest of the state, the minimum wage will increase to $9.70 at the end of 2016, and will increase by an additional $0.70 each year after, reaching $12.50 in 2020. Additional increases will then be scheduled by the state’s Director of the Division of Budget, in consultation with the Department of Labor.
The minimum wage law also provides a “safety valve” provision. Beginning in 2019, the Director of the Division of Budget can temporarily suspend the scheduled increases if it is deemed necessary during annual analyses of the economy in each region and the statewide effect of the minimum wage increases.
An estimated 2.3 million workers will earn higher pay as a result of the minimum wage increase. Employers will need to revise and monitor their payroll practices in order to ensure compliance with the yearly increases.
In addition to the minimum wage increase, Gov. Cuomo also signed into law a 12-week paid family leave policy, the most comprehensive such policy in the country. New York will allow workers to take 12 weeks paid leave to care for an infant or a family member with a serious health condition, or to attend to family matters when someone is called to active military service.
The benefits will be phased in gradually, beginning in 2018. Employees will initially get up to 8 weeks off, at 50% of their weekly pay, capped at a maximum of 50% of the statewide average weekly wage (approximately $630). The plan will be fully phased in by 2021, when employees will be able to get up to 12 weeks off, at two-thirds of their weekly pay, capped at two-thirds of the statewide average weekly wage. Employees are eligible to participate in the leave program once they have worked for their employer for six months.