As we are now in the final quarter of 2015, New York State employers should begin preparing for the many impending minimum wage increases – yes, there will be multiple increases – all of which take effect December 31, 2015. The details of each are discussed below.
General Increase for Non-Exempt and Exempt Workers
The change impacting the broadest range of New York employers will be the jump in the minimum wage rate for almost all most non-exempt (i.e., hourly) employees, from $8.75/hour to $9.00/hour. This raise marks a near 25 percent increase over the past two years in the statewide minimum wage. In addition, the minimum salary for certain exempt employees – those who meet the executive and administrative overtime exemptions – will increase from $656.25/week to $675.00/week.
Wages for tipped employees in the hospitality industry are also on the rise. As we previously reported, on February 24, the acting Commissioner of the New York State Department of Labor (the Commissioner) accepted a wage board’s proposal to increase the pre-tip minimum wage to $7.50/hour for such workers. This increase will also cause a corresponding reduction in the state’s tip credit (to $1.50/hour), which permits businesses to pay tipped employees less than the minimum wage, provided that such employees earn enough gratuities to cover the difference.
Notably, the new pre-tip minimum wage will apply equally across all employment classifications. In other words, there will no longer be any minimum wage differentiation between food service and non-food service workers. This change is the result of another wage board proposal the Commissioner recently accepted.
Fast Food Workers
Finally, following a highly publicized campaign by Gov. Andrew Cuomo, wages for fast food workers will also increase at year’s end. On September 10, the Commissioner accepted a wage board’s proposal to increase the minimum wage for such workers to $15.00/hour. This increase will be phased in over three years for workers in New York City, and over five-and-a-half years for workers in the rest of the state.
For 2016, the first year of the staggered implementation, the new minimum wage rate for fast food workers in NYC will be $10.50/hour, and $9.75/hour throughout the rest of the state. The Commissioner’s order adopting the wage board’s proposals, which can be found here, provides additional information regarding the fast food wage hike, including definitions of key terms.
What Does This Mean for My Company?
2016 promises a bevy of new, New York wage and hour rules. New York employers should consult with experienced counsel to discuss the anticipated rule changes, and make preparations to face them with a financially sound plan of action that will minimize disruption to their businesses.