As employers gear up for the holiday season and to navigate the impact of the presidential election, New York businesses should bear in mind a litany of new laws and regulations set to go into effect at the beginning of 2025. Some are broadly applicable while others are relevant for only specific industries. Here is a rundown of each with compliance tips.
Wage-and-Hour Increases
New York employers have become accustomed to annual or other increases in various areas of wage and hour law, and 2025 will prove to be no different.
Minimum Wage Rate Hikes
In 2023, Gov. Kathy Hochul signed legislation adopting a three-year period of annual increases to the state's minimum wage rates, followed by a market-based approach to adjust minimum wage rates moving forward.
Beginning Jan. 1, 2025, the hourly minimum wage for employees in New York City, Westchester and Long Island will increase from $16 to $16.50. This rate will further increase on Jan. 1, 2026, to $17.
Also effective on Jan. 1, 2025, employees in the rest of New York state (areas outside of New York City, Westchester and Long Island) will see the minimum wage annual rate increase from $15 to $15.50. This rate will further increase on Jan. 1, 2026 to $16.
We note that these new statutory minimum wage rates apply to all New York employers regardless of size, notwithstanding that, prior to 2024, the minimum wage was tied to an employer's employee headcount.
Looking ahead, the legislation mandates that the minimum wage rate for 2027 and beyond will be tied to the three-year average of the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) for the northeast region. Thus, economic conditions could prevent a rate increase for a particular year. The New York Department of Labor (NYDOL) is tasked with monitoring the statewide economy and adjusting the minimum wage accordingly. If the NYDOL determines a rate increase is appropriate, it must post the adjusted rate no later than Oct. 1 of the year prior to give employers sufficient time to prepare.
Overtime Exemption Salary Threshold Increases
Under Section 142-2.14 of the New York Codes, Rules, and Regulations (NYCRR), employees who work in an "executive" or "administrative" capacity and who are paid a "salary" not less than the thresholds set by state regulations may be exempt from the state's overtime pay requirements. In late 2023, the NYDOL adopted a revised schedule to increase the minimum salary basis thresholds for certain overtime exemptions under the New York Labor Law (NYLL).
Currently, those working in New York City, Long Island, and Westchester may be subject to the executive or administrative exemption if they make at least $1,200 per week ($62,400 per year). On Jan. 1, 2025, that threshold increases to $1,237.50 per week ($64,350 per year). And this threshold will further increase to $1,275 per week ($66,300 per year) on Jan. 1, 2026.
Similarly, those currently working in the rest of New York state (areas outside of New York City, Westchester and Long Island) in executive or administrative role may be exempt from overtime if they make $1,124.20 per week ($58,458.40 per year). As of Jan. 1, 2025, that threshold will increase to $1,161.65 per week ($60,405.80 per year), and will increase once more on Jan. 1, 2026, to $1,199.10 per week ($62,353.20 per year).
Sick Leave Updates: Prenatal Leave and Sunset of COVID Paid Sick Leave
The state 2025 budget passed earlier this year adds a first-in-the-nation paid prenatal leave for covered employees and also sunsets COVID paid sick leave.
First, New York added a new paid prenatal personal leave entitlement to Section 196-b of the New York Labor Law, otherwise known as the New York State Paid Sick Leave Law.
Effective Jan. 1, 2025, employers must provide at least 20 hours of paid prenatal personal leave each year in addition to the existing statutory paid sick leave entitlement. Eligible employees may utilize this leave in hourly increments to receive health care services during their pregnancy or related to a pregnancy, including physical examinations, medical procedures, monitoring and testing, and discussions with a health care provider related to pregnancy.
This prenatal leave entitlement will be in addition to the sick leave provided under the New York State Paid Sick Leave Law. Therefore, eligible employees will be entitled to use up to a total of either 60 hours or 76 hours (depending on employer size) of paid leave for various medical needs.
Finally, effective July 31, 2025, New York state COVID-19 leave will no longer be available under the Emergency Leave Law. However, employees may continue to use other qualifying paid leave, such as New York Paid Sick Leave, for COVID-19-related reasons.
Retail Workplace Safety Law
Loosely modeled off of California's workplace violence prevention requirements, Hochul signed legislation in September 2024 mandating the establishment of a workplace violence prevention policy, notice and training program, and the installation of panic buttons in the workplace. But these components do not all share the same effective date as outlined below.
At the outset, the statute defines covered employers as "any person, entity, business, corporation, partnership, limited liability company, or an association employing at least ten retail employees." The term "retail employees," in turn, is defined as "employees working at a retail store for an employer" and a "retail store" is defined as "a store that sells consumer commodities at retail and which is not primarily engaged in the sale of food for consumption on the premises." Certain entities are statutorily excluded from coverage, including stores that primarily engage in the sale of food for consumption on premises as well as state actors.
There is no additional guidance at this time further defining these terms. As such, despite these statutory definitions, there have been many inquiries surrounding the scope of coverage. For example, we have received questions regarding the intended meaning of the terms "that sells consumer commodities at retail" and "primarily" in the statutory definition of "retail store." We expect the NYDOL to provide guidance in the coming months.
As to the substantive components of the statute, the written policy, notice, and training requirements will take effect on March 4, 2025.
The statute directs the NYDOL to publish a model plan for employers to adopt, though employers can alternatively establish their own policy equaling or exceeding the below minimum standards. The policy must outline a list of factors or situations in the workplace that might place retail employees at risk of workplace violence; list methods that employers may use to prevent incidents of workplace violence; include information concerning the federal and state statutory provisions concerning violence against retail workers and available remedies for violations of the same; and clearly state that retaliation against those who complain of workplace violence or who testify or assist in any proceeding under the law is unlawful. Employers must also provide the policy to employees in writing upon hire and annually.
The statute similarly requires the NYDOL to prepare model compliant training for employers to adopt, though again employers can create their own training that is at least the equivalent of the state's model training. The training must address various topics, including examples of measures retail employees can use to protect themselves when faced with workplace violence from customers/coworkers; de-escalation tactics; active shooter drills; emergency procedures; and instruction on the use of security alarms, panic buttons, and other related emergency devices. This training must be provided to all covered employees at the time of hire and annually thereafter.
Finally, employers must provide all covered employees at the time of hiring and at every annual workplace violence prevention training—in writing and in English and in the language identified by each employee as their primary language—a notice containing the employer's violence prevention policy and the information presented at the training.
As for the panic buttons, the effective date is Jan. 1, 2027, nearly two years after the effective date for the other provisions of the retail workplace safety law. Moreover, this requirement is only applicable to employers with 500 retail employees nationwide.
These panic buttons may be physical or phone-based. However, should an employer choose to use wearable or mobile phone-based panic buttons, the employer must provide such panic buttons to each of its employees.
Outlook
Between the upcoming presidential election and the holiday season, these important considerations can easily fall by the wayside. New York employers should keep in mind these new or revised laws impacting their pay practices and safety procedures as we approach the end of 2024 and look ahead to 2025.
Originally published by New York Law Journal.
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.