New York is officially on the $15 minimum wage bandwagon. Governor Andrew Cuomo recently 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 programme, 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. Cuomo signed the bill into law on April 4 2016.

Minimum wage increase

Unlike California's recent state-wide minimum wage increase, New York's law will be implemented region by region.

New York City businesses with at least 11 workers must pay a minimum wage of $11 per hour by the end of 2016, with $2 increases in each subsequent year to reach $15 per hour 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 per hour 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 per hour at the end of 2016 and increase by an additional $0.70 each year after, reaching $12.50 per hour in 2020. Additional increases will then be scheduled by the state's director of the Division of Budget, in consultation with the Department of Labour.

The minimum wage law also includes 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 state-wide 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.

Paid family leave

In addition to the minimum wage increase, Cuomo 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 eight weeks off at 50% of their weekly pay, capped at a maximum of 50% of the state-wide 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 state-wide average weekly wage. Employees are eligible to participate in the leave programme once they have worked for their employer for six months.

For further information on this topic please contact Heidi Larson Howell or Cody E Schvaneveldt at Sidley Austin LLP by telephone (+1 213 896 6000) or email (hlarsonhowell@sidley.com or cschvaneveldt@sidley.com). The Sidley website can be accessed at www.sidley.com.

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