In a significant development for employers across New York State, Governor Kathy Hochul recently announced a historic plan to increase the minimum wage. This agreement will impact employers and employees alike. So, it is crucial for employers to understand the changes and implications of the 2024 New York State minimum wage raise.
What Makes This Wage Increase Legislation Different
The new wage increases do not differ based on employer size and will affect New York City, Nassau County, Suffolk County, and Westchester counties, unlike previous increases in minimum wage.
Key Changes in the Minimum Wage
The 2024 New York State minimum wage increases will be determined based on geographic location within the state as written below:
NYC, Long Island, Suffolk, and Westchester county’s minimum wage will be $16.00 per hour in 2024.
The remainder of the state’s minimum wage will be $15.00 in 2024.
Specifics Regarding Hospitality and Home Care Industries
In the NYC, Nassau, Suffolk, and Westchester County areas:
Home care employees in this area specifically will have their minimal wage increased to $18.55 per hour in 2024. Tipped food service workers will be required to earn $10.65 cash wage, $5.35 credit. This is a $16.00 total.
In the remainder of the state:
Home care employees in this area specifically will have their minimal wage increased to $17.55 per hour in 2024. Tipped food service workers will be required to earn $10.00 cash wage, $5.00 credit. This is a $15.00 total.
For home care employees performing work outside of NYC, Long Island, and Westchester, the minimum wage will increase to $18.10 on January 1, 2025, and $18.65 on January 1, 2026. Importantly, statewide in New York, starting in 2027, the minimum wage is set to continue to increase based on an index which is tied to inflation.
Exemptions to Wage Increases
Undoubtedly, there will be no increase for a given year if the inflation index is negative, if the state unemployment rate increases by half a percentage point from its low during the preceding year. Additionally or if the total non-farm state employees decrease over the last six months.
In addition, if the historical salary basis threshold of 75 times the minimum wage remains the same, the 2024 exempt salary threshold for such employees in New York City, Long Island and Westchester would increase.
Implications for Employers
The implications of the 2024 New York State minimum wage increase will affect 2024 budget considerations. Employers must factor in the increased labor costs when planning their budgets for 2024. Correspondingly, this may include reassessing compensation structures, payroll processes, and overall financial planning.
Compliance
Failure to adhere to the new minimum wage rates can result in legal repercussions for employers. Inevitably, it is essential to update payroll systems and practices to ensure that employees are paid according to the updated standards.
Reviewal Employment Contracts
Employers should review existing employment contracts, collective bargaining agreements, and employee handbooks to ensure they reflect new rates. Also, necessary revisions should be made promptly to avoid potential disputes.
Monitoring Legislation
Employers should stay informed about any future legislative changes related to minimum rates. The New York State government may continue to adjust these rates in response to economic conditions. Consequently, employers should assess the threshold for applicability of wage payment protections for certain persons employed in a bona fide executive, administrative, or professional capacity, which has increased as part of the New York State Assembly Bill S5572. Chiefly, the recently passed bill would increase the earning requirement to be excluded from coverage. Therefore, failure to comply with the terms and conditions laid out in this bill can result in employers being accused of wage theft.
Conclusion
The 2024 New York State minimum wage increase marks a significant development for employers. Most especially, this applies to those in downstate, suburban, and upstate regions. Therefore, employers must make adjustments to pay practices, update policies, and stay proactive in understanding and implementing these changes. Otherwise, a challenge could arise in an effort to ensure compliance with the law and to maintain a harmonious relationship with their workforce.
As your trusted legal partner, Sinayskaya Yuniver, PC., is here to provide guidance and support throughout this transition. Meanwhile, we are committed to assisting our clients navigating the complexities of employment law in New York State.
For more information or legal assistance, please visit www.sypcl.com.
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