The New York minimum wage was established in the late 1960s, two decades after the national minimum wage was established. Since then, the minimum wage has risen gradually since the 1970s, with the latest increase in December 2017. New York’s minimum wage tends to be higher than the federal minimum wage for both tipped and untipped workers, and it requires employers within the state to increase their employee’s hourly rates to reflect the minimum wage.
The New York government imposes 14 minimum wages that are spread across the state, and they vary depending on the size of the employer, industry, employee type, and geographical location.
New York Minimum Wage Legislation
The New York minimum wage is the result of the 2016-2017 State Budget that was signed by Governor Andrew Cuomo, approving the statewide $15 minimum wage plan for over 2.1 million workers in the state. The legislation raises the minimum wage to $15.00 in three state regions: New York City, downstate counties that include Nassau, Suffolk, and Westchester, and the remainder of New York State.
The law also sets different minimum wage hourly rate increases for small and large employers in New York. The minimum wage rate will increase until it reaches the $15 minimum wage and $10 for tipped workers.
New York General Minimum Wage
New York grants two main minimum wages that vary depending on the size of the business, i.e., small or large employer.
1. New York Small Employer
Small employers are defined as businesses with 10 or fewer employees. The New York minimum wage for the small-employer category was $10.50 when it was increased to $12.00 in December 2017. The rate is due to increase to $13.50 in December 2018 and, finally, to $15.00 in December 2019.
2. New York Large Employer
Large employer refers to businesses with 11 or more employees. As of December 2016, the New York minimum wage for the large-employer category was $11.00, and the rate was raised to $13.00 in December 2017. The minimum wage rate is due to rise to $15.00 in December 2018.
3. Nassau, Suffolk and Westchester Counties
The minimum wages for the three counties was $10.00 in December 2016, and the rate was raised to $11.00 in December 2017. The figure is due to increase to $12.00 in December 2018, $13.00 in December 2019, $14.00 in December 2020 and finally, to $15.00 in December 2021.
4. The remainder of New York State
The remaining cities and towns in New York state followed a minimum wage of $9.70 as of December 2016. The rate increased to $10.40 in December 2017 and is due to increase to $11.10 in December 2018. Other minimum wage increases are scheduled to rise further to $11.80 in December 2019 and $12.50 in December 2020. The Director of the Division of Budget is required to create a schedule for additional rate increases until the rate reaches the $15 per hour New York minimum wage.
New York Minimum Wage for Fast Food Workers
Fast food workers are individuals employed by fast food establishments. Fast food restaurants may include businesses that serve food or drinks (coffee shops, donut shops, juice bars, etc.), businesses that allow customers to order and pay before eating, and businesses with a chain of 30 or more locations nationwide.
The hourly wage rate for fast food employees in New York City stands at $13.50 as of December 2017 and is due to increase to $15.00 in December 2018. On the other hand, the minimum wage for New York state, excluding New York City, is $11.75 as of December 2017. The figure is due to increase as follows:
$12.75 on December 31, 2018
$13.75 on December 31, 2019
$14.50 on December 31, 2020
$15.00 on July 1, 2021
Tipped Workers Minimum Wage
The New York minimum wage legislation allows tips to be calculated towards an employee’s minimum wage, thus lowering an employer’s salary obligation if tip credits are expected to be higher. If the tips are not sufficient to reach the required minimum wage, the employer is required to pay the minimum wage for tipped workers.
Before December 2015, the New York minimum wage for tipped workers in the food industry was $5.00 with a maximum tip credit of $3.75. Service industry employees used to receive a minimum wage of $5.65 per hour and a maximum tip credit of $3.10. Individuals employed by resort hotels received a minimum wage of $4.90 and a maximum credit of $3.85.
Under the new legislation, the minimum wage for employees working in resort hotels will be two-thirds of the set minimum wage, or $7.50, whichever is higher. The minimum wage and the maximum tip credit are scheduled to increase gradually until they reach $15.00 in total by December 31, 2021.
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