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Your Guide to New York’s Minimum Wage

Square
Editorial Team

If you’re a business owner in New York, you know that Governor Cuomo signed legislation that calls for an increase in New York minimum wage and paid leave. 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.

What is the minimum wage in New York?

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: $13.50 (on 12/31/2018)
  • NYC businesses with 11 or more employees: $15 per hour
  • Nassau, Suffolk, and Westchester county businesses for all workforce sizes: $14
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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 2021
  • Rest of New York state: $13.75 per hour, currently. Starting December 31, 2020, this will rise to $14.50 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 with 11 or more employees: $12.50 per hour and $2.50 in tip credit

  • NYC businesses with 10 or fewer employees: $12.50 per hour and $2.50 in tip credit
  • Nassau, Suffolk, and Westchester county businesses for all workforce sizes: $10.85 per hour and $2.15 in tip credit. Starting on December 31, 2020, this will rise to $11.65 per hour with $2.35 per hour in tip credit

  • Rest of New York: $9.85 per hour and $1.95 in tip credit. Beginning on December 31, 2020, employers will have to pay $10.40 per hour with $2.10 in top 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: $8.65 per hour and $4.35 in tip credit. Starting on December 31, 2020, employers will need to pay $9.35 per hour and $4.65 tip credit.
  • Rest of New York state: $7.85 and $3.95 in tip credit. On December 31, 2020, employers are required to pay $8.35 per hour and $4.15 in tip credit

I heard the minimum wage is supposed to be $15. Is the wage going to continue to increase?

Yes. Currently, the minimum wage in New York City is $15. The rest of the Empire State will continue to increase gradually each year until reaches $15. Below is the rate increase schedule:

  12/31/2020 12/31/2021
NYC 10 or fewer employees $15 $15
NYC 11 or more employees $15 $15
Nassau, Suffolk and Westchester Counties $14 $15
Rest of state $12.50 TBD

If the New York minimum wage for 2021 worries you, we’ve got some good news: Starting in 2019, the state’s Department of Budget (DOB) Director runs an annual analysis of the economy in each region—looking at the impact of the minimum wage increases statewide—to determine whether a temporary suspension of the scheduled increases is necessary.

What’s the plan for paid family leave?

Under Governor Cuomo’s plan, New York employers will be required to provide 12 weeks of paid family leave benefits to eligible employees (i.e., full-time and part-time employees who have worked at a company for six months).

Just like the minimum wage, the paid leave benefits will also be phased in. At the beginning of 2018, employees will be eligible for eight weeks of leave. Then by 2021, employees will be eligible for the full 12 weeks.

Stressed about how much this new paid family leave law will cost your business? Don’t be. The new family leave program will be funded entirely via a nominal employee payroll deduction, resulting in zero cost to businesses.

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

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.

The Square Editorial Team is dedicated to telling stories of business, for business owners. Our team comes from a variety of backgrounds and share a passion for providing information that helps businesses to start, run, and grow. The team is based in San Francisco, but has collaborators all over the country.