ALBANY – New York will ring in the new year the same way it has since 2016: by increasing the minimum wage.
The increase will mark the third time the state has raised its minimum wage in the last three years and comes as part of a multi-year deal passed by lawmakers in 2016 to reach a $15 minimum wage downstate by December 2021.
“By raising the minimum wage, New York has once again set an example that the rest of the country should follow — a fair day’s pay, for a fair day’s work and bringing economic justice to people in this state," Jason Conwall, a spokesman for Gov. Andrew Cuomo, said in a statement.
But some workers may be celebrating more than others.
That's because the plan to reach a $15 an hour minimum wage by December 2021 divided the state into three regions: New York City; Long Island and Westchester County; and the rest of New York.
From there, a worker's salary is determined by their industry, and in places like New York City, the size of the employer.
Workers in the hospitality, fast food, building service, nonprofit and farming industries earning minimum wage will all see increases to their salary this year, but at different rates.
Employees for large New York City employers with 11 or more workers along with city fast-food workers will be the first to reach $15 an hour come Dec. 31. The rest of the state will lag behind.
Long Island and Westchester County will not reach $15 an hour until December 2021 and the rest of the state is scheduled to reach $12.50 an hour by December 2020 before eventually reaching $15 at a date yet to be determined.
Confused? You're not alone.
Reason and Debate
The decision to stagger the wage increases was a "recognition of the fact that each part of the state has a unique economy," according to Conwall.
"It was important to employers that they would be able to plan and budget for the increases every year," said Mario Cilento, president of NYS AFL-CIO, the union group that lobbied for the law.
Cilento said he hopes the state's Democrat-controlled government continues to push worker-friendly legislation and moves to expedite wage increases to $15 outside of New York City.
For now, he said, any wage increase is a positive.
"Not only are our members making more money, the economy of the state is thriving, and as a result, we think it's a win-win for everyone else," Cilento said.
But the state's Business Council has argued raising the minimum wage to $15 an hour will adversely impact the business community in an already high-tax state and could potentially harm workers in the long run.
"We think it's too high a target," Ken Pokalsky, vice president of the state's Business Council, said of the state's $15 an hour goal.
The new law means some businesses may be forced to slash hours or reduce their number of employees, according to Pokalsky.
"It's another cost mandate," he added.
Assembly Minority Leader Brian Kolb, R-Canandaigua, Ontario County, said the increasing minimum wage will put a damper on the number of entry-level jobs available for new workers.
He has proposed legislation that would allow businesses to pay a temporary training wage – 85 percent of the minimum wage – to youth workers with no prior experience.
“When you look at those increased costs, companies start to look at where they can automate,” he said.
“That’s why you’re starting to see some of the fast-food outlets go to kiosks to place orders with a goal, obviously, of minimizing the need of hiring more people at a higher cost.”
With wage increases scheduled for Dec. 31, here's what it means for you:
Workers from Long Island and Westchester County aren't expected to receive a $15 minimum wage until Dec. 31, 2021.
For now, minimum-wage employees across the three counties — which includes Nassau and Suffolk — will receive a $1 pay raise, bringing hourly wages to $12.
Unlike New York City, there is no difference in pay between large and small employers.
But that's not the only variation between the two regions.
Fast-food industry
Fast-food workers throughout the three counties will earn $12.75 come Dec. 31, a $1 boost.
The increase, however, still puts workers $2.25 an hour behind their city counterparts.
"I think it's an acknowledgement that while it's the same state, economic conditions greatly differ," Kevin Dugan, government affairs director of the state's Restaurant Association, said.
Fast-food workers outside the city will begin earning $15 an hour, but not until July 2021.
"It's an unfortunate reality that the cost of living is far different in these different communities," Dugan said.
Tipped wages
Both resort and non-resort workers will begin earning a $10 cash wage and a $2 tip credit, an increase of 85 cents and 15 cents respectively.
The wage increases have caused some businesses to begin replacing staff, according to Mark Dorr, president of the state's Hospitality and Tourism Association.
"For the hotel industry...the minimum wage increase has expedited the path to automation," Dorr said.
Operating costs have caused approximately 200 hotels across the state, most with 20 or less rooms, to either reduce their seasonal operations or close entirely since 2015, according to Dorr, who said increasing wages have only exacerbated the problem.
"It's a big item for them, jumping the minimum wage the way they did," he said.
Food service workers are also getting a 50 cent boost to both their cash wage and tip credit, brining each to $8 and $4 respectively.
New York considered getting rid of the tipped wage this year, but the measure stalled in the Legislature and with Cuomo.
Exceptions
Similar to New York City, residential janitors will be paid far less — just $8 an hour — than those in other industries, despite a 65 cent raise.
Rest of the state
Workers throughout the rest of the state will begin earning $11.10 an hour come Dec. 31, a 70 cent pay raise from last year.
It's not known when the rest of the state will reach a $15 an hour minimum wage. The state said it would consider annual increases after 2020.
Workers in places like the Finger Lakes Region, Mid-Hudson Valley and Southern Tier are scheduled to see their wages increase to $12.50 an hour on Dec. 31, 2020.
From there, wages are expected to increase gradually year-to-year until reaching $15, according to the state.
"We were pleased with that compromise," said Kamala Keeley, president of the Chemung County Chamber of Commerce, of the state's decision to stagger wage increases.
"From the chamber of commerce perspective, from the business perspective, we would like to see the economy doing well enough that we can afford to pay people a better minimum wage and better wages in general," she added.
The cost of living and median salary for a majority of the state is far lower than places like New York City, Long Island and the lower Hudson Valley, according to a report released earlier this year by the Economic Policy Institute, a liberal think tank based in Washington.
But even with lower living expenses, New Yorkers in places north of Westchester County require higher wages, according to Paul Sonn, state policy program director for the National Employment Law Project, an advocacy group that lobbied for increasing the state's minimum wage in 2016.
"There are definitely differentials living costs, but that doesn't mean that workers upstate don't need $15 an hour to afford housing and transportation and healthcare and other basic needs," Sonn said.
A report highlighting how the state's increasing minimum wage has impacted local economies is due early next year.
"It's well meaning and well intention coming out of Albany, but the problem is that it's not happening in an organic way," Keeley said.
"When business is successful, they pay their employees more."
Tipped wages
Resort and non-resort employees are expected to see their cash wage increase to $9.25 and tip credit climb to $1.85.
Food service workers will see their cash wage remain steady at $7.50. Their tipped wage, however, will climb to 50 cents from last year, to $3.60.
Exceptions
Fast-food wages will see the greatest increases throughout the state.
That's because they will be in line with those in Long Island and Westchester, increasing to $12.75 the end of this year.
Residential janitors see their hourly wage increase by 45 cents to $7.40.
New York City
New York City's minimum wage breakdown is arguably the most complicated.
It's split between large and small employers, various industries, and has seen the largest pay increases since the law went into effect.
The city is also the first portion of the state to reach a $15 minimum wage, depending on industry and employer size.
Here's how it breaks down.
Employer size
Large employers, made up of 11 or more employees, will be the first to begin paying their workers $15 an hour come Dec. 31, a $2 increase from last year.
Workers for small employers, with 10 or less employees, regardless of industry, will receive a $1.50 pay increase, bringing their hourly earnings to $13.50.
The minimum wage for small employers is expected to reach $15 an hour the end of next year.
City fast-food workers will begin earning $15 an hour this year as well, regardless of employer size. That's a $1.50 increase.
Tipped wages
Here's where things get complicated.
Tipped wages apply only to those in the hospitality service industry — all of whom will begin earning the state's minimum wage based on where they live, and in New York City, the size of their employers.
Their salary, however, is divided into two parts — cash wage and tip credit.
The cash wage is how much a worker receives an hour and the tip credit is how much an employer must pay their workers in tips per hour, Dugan said.
New York City service employees for large resort and non-resort businesses will begin earning a cash wage of $12.50 and a $2.50 tip credit come Dec. 31.
Small employers will pay slightly less, just $11.25 cash wage and a $2.25 tip credit.
Food service workers, such as waiters, are another deviation in the law.
There is no limit as to how much a food service worker can earn in tips, according to Dugan. But if a server is not earning the required minimum in tips, then the owner must compensate.
Large restaurant employers will have to begin paying their employees a $10 cash wage and a $5 tip credit, a $1.65 and 35 cent increase respectively.
Small employers will have to pay just a $9 cash wage and a $4.50 tip credit, up from $8 and $4 last year.
The increase costs may force some restaurant owners to cut hours or reduce staff, and in the case of some chain restaurants, replace workers altogether with automated tabletop kiosks, according to Dugan.
"The restaurant industry really is every dollar matters," he said. "As these labor costs go up, restaurants are forced to make difficult decisions."
Exceptions
Residential janitors stand to make far less compared to those in other industries.
Those working for large employers will begin earning $10 an hour, while those employed by small employers will see just a $9 minimum wage.
For more information about New York's minimum wage, visit: https://labor.ny.gov/workerprotection/laborstandards/workprot/minwage.shtm