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Governor Cuomo and Legislative Leaders Announce Agreement on Minimum Wage Increase and Paid Family Leave

Governor Andrew M. Cuomo and state legislative leaders last night announced an agreement on the 2016-17 state budget, which includes an increase in the minimum wage and, what the Governor calls, the "longest and most comprehensive paid family leave program in the nation."

Minimum Wage Details

  • For workers in New York City employed by large businesses (those with at least 11 employees), the minimum wage would rise to $11 at the end of 2016, then another $2 each year after, reaching $15 on 12/31/2018.
  • For workers in New York City employed by small businesses (those with 10 employees or fewer), the minimum wage would rise to $10.50 by the end of 2016, then another $1.50 each year after, reaching $15 on 12/31/2019.
  • For workers in Nassau, Suffolk and Westchester Counties, the minimum wage would increase to $10 at the end of 2016, then $1 each year after, reaching $15 on 12/31/2021.
  • For workers in the rest of the state, the minimum wage would increase to $9.70 at the end of 2016, then another $0.70 each year after until reaching $12.50 on 12/31/2020 - after which will continue to increase to $15 on an indexed schedule to be set by the director of the Division of Budget (DOB) in consultation with the Department of Labor.

Further, the bill provides a safety valve to the increases. Beginning in 2019, the state DOB director will conduct an annual analysis of the economy in each region and the effect of the minimum wage increases statewide to determine whether a temporary suspension of the scheduled increases is necessary. That analysis is submitted to the Department of Labor by the Division of Budget.

It is estimated that more than 2.3 million people will be affected by the increases in the minimum wage.

Paid Family Leave Details

When fully phased in, employees will be eligible for 12 weeks of paid family leave when caring for an infant, a family member with a serious health condition, or to relieve family pressures when someone is called to active military service.

Benefits will be phased in beginning in 2018 at 50% of an employee's average weekly wage, capped to 50% of the statewide average weekly wage, and fully implemented in 2021 at 67% of their average weekly wage, capped to 67% of the statewide average weekly wage. This program will be funded entirely through a nominal payroll deduction on employees, so it costs businesses - both big and small - nothing. Employees are eligible to participate after having worked for their employer for six months.

It should be noted that the rest of the state's lawmakers must still review and approve the budget proposals.

Should you have questions on this or any other employment law matters, please contact Mr. Kimler at 516.437.4385 x122 / akimler@vmmlegal.com.

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