Seyfarth Synopsis: Beginning January 1, 2024, the minimum wage across New York State will gradually increase to account for the rising cost of living.
Minimum Wage Increases Through 2026
The Fiscal Year 2024 New York State Budget (the "Budget") includes a multi-year plan to increase the State's minimum wage starting on January 1, 2024. The Budget legislation signed by Governor Hochul on May 3, 2023 provides for increases to the minimum wage rate as follows:
|
Effective Date |
New York City, Long Island, and Westchester |
Remainder of New York State |
| January 1, 2024 | $16.00 | $15.00 |
| January 1, 2025 | $16.50 | $15.50 |
| January 1, 2026 | $17.00 |
$16.00 |
These new statutory minimum wage rates apply to all New York employers regardless of size. In previous years, the minimum wage was tied to an employer's number of employees, but that provision has now been removed.
Minimum Wage Increases in 2027 and Beyond
The Budget also regulates minimum wage rates well beyond 2026. As of January 1, 2027, the minimum wage will be based on the Consumer Price Index for Urban Wage Earners and Clerical Workers ("CPI-W") for the Northeast Region. Governor Kathy Hochul explained that "indexing the minimum wage to inflation will help hundreds of thousands of New Yorkers maintain their purchasing power, contribute to the state economy, and support our small business community."
However, this plan will not necessarily increase the minimum wage from year to year. The budget legislation clarifies that the State will suspend its minimum wage increases in the event of certain economic conditions. For instance, the annual raises will be paused when the prior year's CPI-W for the Northeast Region is negative or when the New York State unemployment rate increases by 0.5% or more.
The New York State Department of Labor ("DOL") will be tasked with monitoring the New York State economy and adjusting minimum wage rates each January as appropriate. In the event of an increase, the DOL will post the adjusted rate no later than October 1 of each year, thereby ensuring that employers will have at least three months to prepare for the new minimum wage to take effect.
No Change to Exempt Status Thresholds
In past years, the State has raised the minimum salary for exempt status under the Labor Law at the same time it increased the minimum wage. The new Budget does not provide for such an increase. Thus, the exempt status thresholds remain as follows:
| Size/Location of Employer | Salary Threshold |
| New York City, 11 or more employees | $1,125 per week ($58,500 per year) |
| New York City, 10 or fewer employees | $1,125 per week ($58,500 per year) |
| Long Island and Westchester, regardless of size of employer | $1,125 per week ($58,500 per year) |
| Remainder of the New York State, regardless of employer size |
$1,064.25 per week ($55,341 per year) |
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