United States: New York Employers: Upcoming Minimum Wage Increases And Additional Reminders

Many businesses are beginning to plan their budgets for 2017. When doing so, employers are reminded to take into account the following minimum wage increases that go into effect on December 31, 2016.

New York State Minimum Wage Increases

As outlined in a previous alert, the New York State minimum wage will increase, beginning on Dec. 31, 2016, under the following schedule:

New York City

Employers With More Than 10 Employees

Employers With 10 or Fewer Employees

Nassau, Suffolk and Westchester Counties

Remainder of New York State

Additional Minimum Wage Increases Applicable to Fast Food Establishments

Fast food establishments will be subject to additional wage increases under the Fast Food Wage Order, which we discussed in a previous alert in 2015. Under this order, the minimum wage for fast food workers will increase, beginning on Dec. 31, 2016, under the following schedule:

While these increases are certainly unwelcome news to New York businesses owners, employers must remain vigilant in complying with New York wage and hour laws, or otherwise face penalties and fines on top of the labor costs that they will be required to endure.

Employers are reminded to distribute new Notices of Pay Rate and Payday to their employees upon any change in compensation and to retain copies of them for six years as failure to do so may result in additional penalties and fines. In addition, make sure to follow the requirements concerning the proper language/form to use when providing this notice.

New York State Paid Family Leave Act

Employers are also reminded that they should begin preparing to comply with New York's comprehensive paid family leave law by January 1, 2018.

Under the law, also outlined in a previous alert, New York employers will be required to provide eligible individuals with paid time off from work to attend to familial obligations. Upon full implementation, eligible individuals will be entitled to receive up to 12 weeks of paid time off from work per year.

Under the law, paid family leave will be administered and paid for by the state's disability benefits fund. Employers will not be responsible for paying employees for family leave directly, but will need to arrange for an additional payroll deduction of approximately $1 per week. Notably, individuals cannot concurrently collect family leave benefits and short-term disability benefits from the state.

New York private sector employers, regardless of size, must provide family leave to their employees after 26 consecutive weeks of employment. Employees may take paid family leave in order to:

  • Care for an infant.
  • Care for a family member with a serious health condition (but not an employee's own serious health condition).
  • Relieve family pressures when someone is called to active military service.

The benefits will be phased into implementation between 2018 and 2021 under the following schedule:

  • Jan. 1, 2018
    Individuals will be entitled to take eight weeks of paid leave and will receive 50 percent of their weekly pay with a benefit cap of 50 percent of the New York State average weekly pay (approximately $630 at this time)
  • Jan. 1, 2019
    Individuals will be entitled to take 10 weeks of paid leave and will receive 55 percent of their weekly pay with a benefit cap of 55 percent of the New York State average weekly pay.
  • Jan. 1, 2020
    Individuals will be entitled to take 10 weeks of paid leave and will receive 60 percent of their weekly pay with a benefit cap of 60 percent of the New York State average weekly pay.
  • Jan. 1, 2021
    Individuals will be entitled to take 12 weeks of paid leave and will receive 67 percent of their weekly pay with a benefit cap of 67 percent of the New York State average weekly pay.

Employers are advised to review their employee rates of pay and to make appropriate adjustments by Dec. 31, 2016, in order to ensure that they are compliant with the minimum wage increases. Employers are also advised to review their policies regarding leave to ensure that, commencing in 2018, they comply with the family leave requirements. Employers must also ensure that they comply with the deduction requirements, properly maintain benefits for employees on leave and ensure that employees are reinstated upon expiration of the leave in accordance with the provisions of the law.

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.

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Gregg M. Kligman
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