On May 3, 2023, New York Governor Kathy Hochul announced – and then signed into law – the New York Legislature’s 2024 Budget Agreement (“Budget”), which includes increases to the state’s minimum wage. Effective January 1, 2024, the minimum wage will increase to $16 per hour in New York City and Nassau, Suffolk, and Westchester counties, and to $15 per hour in the remainder of the state. The minimum wage will then increase by another $.50 each year in 2025 and 2026—reaching $17 per hour in downstate New York by 2026. Subsequent annual increases to the minimum wage will be tied to the inflation rate. The State Department of Labor (DOL) is required to publish future adjusted minimum wage rates by no later than October 1st of each year.
The Budget also includes an “off-ramp” in the event of certain economic or budget conditions. If any one or more of the following three exceptions is triggered, no inflation increase will be applied to the minimum wage in a given year:
- The Consumer Price Index for Northeast Region Urban Wage Earners and Clerical Workers (CPI-W) is negative.
- The statewide unemployment rate increases by one-half percentage point or more.
- Total non-farm employment statewide (measured seasonally) decreases.
These exceptions, however, may only pause the minimum wage increase for up to two consecutive years.
Employers should note that the DOL’s minimum wage orders will remain in effect, including provisions addressing minimum salary levels for exempt employees, gratuities, uniform allowances, and the like. As the minimum wage increases take effect, the DOL likely will announce concomitant increases in these amounts through amendments to the wage orders. We will continue to monitor and report on these developments.