New York State Minimum Wage Increase Takes Effect

Many New York employees will be seeing more money in their paychecks, thanks to new state legislation. The minimum wage was increased from $8.75 per hour to $9.00 per hour, as of December 31, 2015. This change now brings the New York minimum pay rate to an amount that is $1.75 higher than the federal minimum wage of $7.25.

Service Workers

This change affects the lowest paid members of the state’s workforce, including laborers, retail workers and those who regularly receive tips for their services.

With tipped workers, employers are granted a “tip credit,” which allows them to pay a promised hourly wage that falls well below the minimum wage, so long as the workers earn a minimum wage when tips are combined with their hourly rate. As of December 31, 2015, state legislators decreased the amount of the tip credit and increased the minimum pay requirement for these workers. Under the new requirements, “service” and “food service” employers can only claim a tip credit of $1.50 per hour, down from $3.50. This effectively increased the required minimum wage for these workers from $5.00 to $7.50 per hour.

Overtime Pay

The new statute also affects the pay that hourly wage workers receive for overtime work. Under federal and state law, overtime is paid at time a half. Therefore, the new overtime rate for minimum wage workers equals $13.50 per hour, up from $13.13 hourly.

If you have questions about New York’s new minimum wage rate, contact our office to speak with an experienced attorney.