Why it matters

Watch out, Chicago, Los Angeles, San Francisco, and Seattle: New York will soon join the highest reaches of minimum wage payments at $15 for state workers after Governor Andrew Cuomo announced a rate hike to be completed by 2021. The move follows his increase to $15 for fast-food workers earlier this year, and although Seattle was the first jurisdiction to reach the $15 mark, the hike will make New York the first state to do so. "I believe that if you work hard and work full time, you should not be condemned to live in poverty," Governor Cuomo said in a statement about the increase. "Today in New York, we are leading by example and creating an economy that is defined by opportunity, not inequality." The schedule of pay raises differs for New York City residents, who will hit $10.50 on December 31 and continue to increase until reaching $15 per hour on December 31, 2018, and the rest of the state, which will not hit $15 until July 1, 2021. The bigger question for employers: will other cities and states follow the trend?

Detailed discussion

Becoming the first state to reach the $15-per-hour minimum wage mark, Governor Andrew Cuomo announced that New York will raise its hourly pay for state workers. The move did not come as a total surprise given Governor Cuomo's repeated efforts at increasing the hourly payment rate. He signed a bill increasing minimum wage from $7.25 to $8.75 in 2013 that included another step up to $9 at the end of 2015. He also accepted the recommendations of a wage board empaneled by the State Department of Labor to raise the hourly wages of tipped workers from $4.90 up to $7.50 and directed the Department of Labor to empanel another wage board earlier this year to consider hiking the minimum wage for fast-food workers. After an investigation, the wage board recommended a jump to $15 per hour, a move that will impact an estimated 200,000 workers.

"I believe that if you work hard and work full time, you should not be condemned to live in poverty. Yet millions of families nationwide continue to be left behind by an insufficient minimum wage—and it's time that changed," Governor Cuomo said in a statement about the increase. "Today in New York, we are leading by example and creating an economy that is defined by opportunity, not inequality. We are restoring the fairness and economic justice that built the American dream and standing up for what's right. I am proud of what we continue to accomplish, because New Yorkers deserve nothing less."

Governor Cuomo estimated that approximately 10,000 state employees will benefit from the pay hike, which includes all workers in executive agencies, the legislature, and the judiciary, as well as the Office of the State Comptroller and the Department of Law. Of the employees, about 1,000 are located within New York City and 9,000 are elsewhere in the state.

The phase-in schedule differs based on residence. New York City workers will step up to $15 beginning December 31, 2015, with a jump to $10.50, then $12 on December 31, 2016, $13.50 on December 31, 2017, and reaching $15 on December 31, 2018. For the rest of the state, the increase will take longer. Hourly rates outside of the City will rise to $9.75 on December 31, 2015, $10.75 on December 31, 2016, $11.75 on December 31, 2017, $12.75 on December 31, 2018, $13.75 on December 31, 2019, $14.50 on December 31, 2020, and finally, $15 on July 1, 2021.

With the increase, New York joins the upper echelons of minimum wage payments. Seattle hit the $15 mark first last year, followed by Chicago, Los Angeles, and San Francisco.

To read Governor Cuomo's remarks about the increase or watch a video of his statement, click here.