Your Guide to New York’s Minimum Wage

If you’re a business owner in New York, you know that former Governor Cuomo signed legislation that calls for an increase in New York minimum wage and paid leave in recent years. But you may still not be clear about the details. Why would you be? With several different minimum wages ranging across various sectors and regions, it’s confusing.

Not to worry: We’ve got you covered. This article walks you through everything you need to know about these new minimum wage and paid leave laws that affect your business in 2023.

What is the minimum wage in New York State in 2023?

The New York minimum wage depends on the location and size of your company. Here’s a quick breakdown of the minimum wage for non-tipped employees:

  • New York City (NYC) businesses with 10 or fewer employees: $15 per hour (on 12/31/2021)
  • NYC businesses with 11 or more employees: $15 per hour
  • Nassau, Suffolk, and Westchester county businesses for all workforce sizes: $15
  • Rest of New York State: $14.20 per hour beginning 12/31/2022
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What about the minimum wage for workers who make tips?

Again, it depends on your company’s industry and location. These are the details:

Fast food workers:

  • NYC minimum wage: $15 per hour. This minimum wage will stay the same for 2023.
  • Rest of New York state: $15 per hour

Hospitality service workers:

The stats below are for workers that spend less than 20 percent of their time on untipped work.

  • NYC businesses: $12.50 per hour and $2.50 in tip credit
  • Nassau, Suffolk, and Westchester county businesses for all workforce sizes: $12.50 per hour and $2.50 in tip credit.
  • Rest of New York: $11.00 per hour and $2.20 in tip credit.

Food service workers:

The stats below are for workers that spend less than 20 percent of their time on untipped work.

  • NYC businesses with 11 or more employees: $10 per hour and $5 in tip credit
  • NYC businesses with 10 or fewer employees: $10 per hour and $5 in tip credit
  • Nassau, Suffolk, and Westchester county businesses for all workforce sizes: $10 per hour and $5 in tip credit.
  • Rest of New York state: $8.80 per hour and $4.40 in tip credit.

The rest of the Empire State will continue to increase gradually each year until it reaches $15.

  12/31/2020 12/31/2021 12/31/2022
NYC $15 $15 $15
Nassau, Suffolk and Westchester Counties $14 $15 $15
Rest of state $12.50 $13.20 $14.20

How should small business owners prepare for minimum wage and paid leave increases in 2023?

Every business is different, so there isn’t one right way to prepare. Here are a few options you may want to consider:

  • Audit your expenses: Check your cash flow in detail and create a hiring plan that you can afford. In some cases, you may find that hiring temporary workers as needed is less expensive than taking on full-time regular staff. If you are a new business, be sure to register for a free EIN so you can begin hiring and to stay compliant
  • Make sure you hire and keep the right employees: Replacing an employee costs a lot. You decrease the total cost associated with recruiting and training when you hire (and then retain) the right people. Look for candidates with good track records, who come recommended, and who fit in with the company culture. Once they’re onboarded, make sure you build a relationship and provide paths for growth; it makes it more likely that they will stay in their role.
  • Increase prices: This is a great way to increase cash flow. Customers are rarely happy with a price hike, but keep in mind that your competitors will be forced to do the same. Just make sure you keep track of trends, and don’t raise prices too high.
  • Update tech: Consider automating certain aspects of the work (like payroll), and learn how to do payroll yourself to reduce production costs. Square Payroll is easy to use and can help you avoid common payroll mistakes.

As always, to make sure your business is prepared and stays in compliance, we recommend that you discuss these upcoming changes to the New York minimum wage and paid family leave laws with your accountant and lawyer.