For any New York employer who thought that the state’s workplace rules and regulations were too easy too comply with, I have good news for you. Empire State lawmakers recently announced an agreement on the 2016-2017 state budget that includes both a complicated, location-specific minimum wage increase, and a comprehensive paid family leave scheme that will take effect in 2018.

Minimum Wage Increase

The new minimum wage increase announced by Governor Andrew Cuomo presents perhaps the most complex wage scheme the state has ever seen. It accounts for regional differences and staggers implementation over as many as five years in parts of the state. Specifically:

  • For workers in New York City employed by large businesses (those with at least 11 employees), the minimum wage would rise to $11/hour at the end of 2016, then another $2 each year after that, eventually reaching $15 on December 31, 2018.
  • For workers in New York City employed by small businesses (those with 10 employees or fewer), the minimum wage would rise to $10.50/hour by the end of 2016, then another $1.50 each year after that, eventually reaching $15 on December 31, 2019.
  • For workers in Nassau, Suffolk, and Westchester Counties, the minimum wage would increase to $10/hour at the end of 2016, then $1 each year after that, reaching $15 on December 31, 2021.
  • For workers in the rest of the state, the minimum wage would increase to $9.70/hour at the end of 2016, then another $0.70 each year after until reaching $12.50 on December 31, 2020, after which it would continue to increase to $15 on an indexed schedule to be set by the director of the Division of Budget (DOB) in consultation with the state Department of Labor.
  • The minimum cash wage for food service workers receiving tips would be two-thirds of the minimum wage rates listed above, depending on the location where the employee works.
  • Finally, beginning in 2019, the DOB would review the economy in each region to determine whether a temporary suspension of the scheduled minimum wage increases is appropriate under the circumstances.

For employees who work in multiple locations throughout the state, employers will have to keep detailed records of such employees’ work locations and ensure that the employees are paid the applicable minimum wage for all hours worked in each region. This means that a non-exempt employee who performs work in both Nassau and Rockland counties in a given workweek would very likely have two different hourly rates of pay for that week.

Paid Family Leave

The agreed-upon state budget would also allow employees who have worked for their employer for at least six months to take up to 12 weeks of paid family leave, beginning in 2018. Employees eligible for such leave can use it to bond with or care for an infant, to care for a family member with a serious health condition, or for any qualifying exigency, as interpreted under the federal Family and Medical Leave Act, arising out of the active duty of certain family members.

Benefits will be phased in beginning in 2018, at 50 percent of an employee’s average weekly wage, capped at 50 percent of the statewide average weekly wage; and fully implemented in 2021, at 67 percent of the employee’s average weekly wage, capped at 67 percent of the statewide average. Funding for this program will come not from employers, however, but rather directly from the employees themselves, who will have $0.70 per week deducted from their paychecks beginning in 2018, increasing to $1.40 per week by 2021.

Lastly, employees who use paid family leave, taken continuously or intermittently, are entitled to return to the position they held when the leave commenced, or to a comparable position with comparable employment benefits, pay, and other terms and conditions of employment.

What Does This Mean for My Company?

Employers should take the provided lead time to ensure compliance with the new laws immediately upon their effective date. Because of the significant gap between the passage of the legislation and their effective dates, the state will likely not accept ignorance or lack of preparation time as mitigating factors for noncompliance. Consult with experienced legal counsel immediately about New York’s new statutory requirements to ensure a smooth transition once these laws take effect.