United States: Minimum Wage Increases In New York: What Employers Should Know

Last Updated: April 19 2016
Article by Stephen A. Fuchs

On April 4, 2016, New York Governor Andrew Cuomo executed sweeping legislation as part of the 2016-17 state budget, implementing a complicated and staggered set of minimum wage increases, and creating a system of paid family leave benefits.1 This Insight describes the schedule and details of the minimum wage increases to be implemented commencing December 31, 2016, and continuing each year until 2021.

Schedule of Minimum Wage Increases

The legislation2 will gradually raise the minimum wage to $15.00 an hour under different schedules in three state regions: 1) New York City; 2) "downstate," which includes Nassau, Suffolk and Westchester counties; and 3) the remainder of New York State ("upstate"). The legislation also sets a different schedule of increases for New York City businesses with 10 or fewer employees.

The current minimum wage in New York is $9.00 per hour, while fast food workers in chain restaurants are currently entitled to a minimum wage of $10.50 in New York City and $9.75 outside of New York City.

The schedule of minimum wage increases is as follows:

Effective Date Workers Employed in New York City by Businesses with 11 or More Employees Workers Employed in New York City by Businesses with 10 or Fewer Employees Workers Employed in Nassau, Suffolk and Westchester Counties Workers in the Remainder of New York State ("Upstate")
December 31, 2016 $11.00 per hour $10.50 $10.00 $9.70
December 31, 2017 $13.00 per hour $12.00 $11.00 $10.40
December 31, 2018 $15.00 per hour $13.50 $12.00 $11.10
December 31, 2019 $15.00 per hour $15.00 $13.00 $11.80
December 31, 2020 $15.00 per hour $15.00 $14.00 $12.50
December 31, 2021 $15.00 per hour $15.00 $15.00 To be determined

After the increase to $12.50 per hour on December 31, 2020, the minimum wage for upstate workers will continue to increase according to an indexed schedule the Director of the Division of Budget, in consultation with the New York Department of Labor, will set, until the minimum wage reaches $15.00 per hour.

Safety Valve in the Event of Economic Decline

The legislation provides a procedure to slow the scheduled minimum wage increases in the event of a slowdown in the New York economy. Commencing in 2019, the Director of the Division of Budget will conduct an analysis of the economy and the effect the increased minimum wage will have in each of the state's three wage regions to determine whether a temporary suspension of the scheduled increases is necessary.

Schedule for Fast Food Workers

A phased-in schedule of minimum wages for workers in "fast food establishments" took effect beginning on December 31, 2015, and remains unchanged by the new minimum wage legislation signed on April 4, 2016.3 Effective December 31, 2015, the minimum wage for fast food workers in New York City is $10.50 per hour, and the minimum wage for fast food workers in the rest of the state is $9.75. Minimum wages for fast food workers will increase under the following schedule.4

Effective Date New York City New York State Outside New York City
December 31, 2015 $10.50 $9.75
December 31, 2016 $12.00 $10.75
December 31, 2017 $13.50 $11.75
December 31, 2018 $15.00 $12.75
December 31, 2019 $15.00 $13.75
December 31, 2020 $15.00 $14.50
December 31, 2021 $15.00 $15.00

What About Tipped Employees?

Tipped employees in New York State received a substantial increase in their cash base hourly rate effective December 31, 2015. Prior to December 31, 2015, the minimum wage for tipped employees in the food service industry was $5.00 per hour with a maximum credit for tips of $3.75 per hour. For service employees, the cash minimum was $5.65 per hour with a maximum tip credit of $3.10. Tipped employees in resort hotels received a cash minimum of $4.90 per hour with a maximum tip credit of $3.85.5 Effective December 31, 2015, the cash wage for tipped employees in all three categories in the hospitality industry is $7.50 and the maximum tip credit is $1.50.6

How will the new minimum wage increases apply to tipped employees? Under the new legislation, the new minimum wage for tipped employees is two thirds of the applicable minimum wage, rounded to the nearest five cents, or $7.50, whichever is higher.7 In the absence of revised wage orders issued by the New York Department of Labor, the minimum cash wage for tipped employees prior to their receipt of tips will increase under the following schedule:

Effective Date Tipped Employees in New York City, 11 or More Employees Tipped Employees in New York City, Fewer Than 11 Employees Employees in Nassau, Suffolk and Westchester Counties Employees in the Remainder of New York State ("Upstate")
December 31, 2016 $7.50

Tip credit: $3.50

Total: $11.00

Tip credit: $3.00

Total: $10.50

Tip credit: $2.50

Total: $10.00

Tip credit: $2.20

Total: $9.70
December 31, 2017 $8.70

Tip credit: $4.30

Total: $13.00

Tip credit: $4.00

Total: $12.00

Tip credit: $3.50


Tip credit $2.90

Total: $10.40
December 31, 2018 $10.00

Tip credit: $5.00

Total: $15.00

Tip credit: $4.50

Total: $13.50

Tip credit: $4.00


Tip credit $3.60

Total: $11.10
December 31, 2019 $10.00

Tip credit: $5.00

Total: $15.00

Tip credit: $5.00

Total: $15.00

Tip credit: $4.30


Tip credit: $4.00

December 31, 2020 $10.00

Tip credit: $5.00

Total: $15.00

Tip credit: $5.00

Total: $15.00

Tip credit: $4.65

Total: $14.00

Tip credit: $4.15

Total: $12.50
December 31, 2021 $10.00

Tip credit: $5.00

Total: $15.00

Tip credit: $5.00

Total: $15.00

Tip credit: $5.00

Total: $15.00
To be determined

Minimum cash base wages for tipped employees will therefore reach $10.00 per hour in New York City, Long Island and Westchester, with a $5.00 per hour tip allowance permitted, provided tips average at least $5.00 per hour, to reach a total minimum wage of $15.00 per hour. Minimum cash wages for the rest of the state would be $8.35 per hour with a $4.15 per hour tip allowance, for a total minimum wage of $12.50, pending the results of the Division of Budget's analysis of the effects of the minimum wage increases.


The $2.00 an hour increase to the minimum wage in New York City represents a 22% raise for most hourly New York City workers earning minimum wage. Indeed, even for relatively small New York City employers (those with as few as 11 employees), the minimum wage will be increasing by two-thirds in a period of just three years. Such large increases will have an effect on thousands of employees who are currently paid above the minimum, as well as on employees who are paid at or near the minimum. Such large increases will not only overtake the wages of employees already paid as much as $6 per hour above the existing minimum; they will have a ripple effect on the wages of supervisory employees and other hourly employees who command rates above minimum wage. Thus, employers employing workers at or near the minimum wage are not the only ones who should plan for the significant wage increases that become effective December 31, 2016, and each subsequent December 31. Because of the extended lead time granted before these increases take effect, the New York Department of Labor is unlikely to grant any "grace period" before enforcing these increases. Employers should consult employment counsel to properly plan compliance with the scheduled increases.


1 An analysis of the state's paid family leave act will be the subject of a separate, forthcoming Insight article.

2 New York State Budget, S. 6406—C. A. 9006 –C (April 4, 2016), at Part K.

3 See George Pauta and Stephanie Kastrinsky, New York "Supersizes" the Minimum Wage for Certain Fast Food Employees, Littler Insight (Sept. 29, 2015). A "fast food" establishment" is defined as any business that 1) primarily serves food or drinks, including coffee shops, juice bars, donut shops and ice cream parlors; and 2) offers limited service where customers order and pay before eating, including restaurants with tables but without full table service, or that provide takeout service; and 3) is part of a chain of 30 or more locations, including individually owned establishments associated with a brand with 30 or more locations nationally. 12 N.Y.C.R.R. 146-3.13(b).

4 12 N.Y.C.R.R. § 146-1.2(b), (c).

5 12 N.Y.C.R.R. § 146-3.13(a)(3).

6 For all other industries except building service, the cash wage for tipped employees is $7.65 where tips are at least $1.35 per hour, and $6.80 when tips are at least $2.20 per hour. No tip credit is permissible for building service employees. 12 N.Y.C.R.R. § 146-1.3(a)(4).

7 New York State Budget, S. 6406--C. A. 9006 --C (April 4, 2016) at Part K, Section 4, amending N.Y. Lab L. 652(4),(5).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Stephen A. Fuchs
In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.