The 2024 New York State budget, which was recently announced, includes a plan whereby the minimum wage will increase throughout the state, beginning on January 1, 2024 and continuing through 2026, as follows:

Following the $0.50 annual increases through 2026, beginning on January 1, 2027, New York State will increase the minimum wage in accordance with the three-year moving average of the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) for the Northeast Region. Governor Hochul explained that indexing the minimum wage to inflation should help maintain the purchasing power of workers’ wages from year to year, while referencing economic research stating that this approach can lead to reductions in poverty, reduced social assistance spending, stimulative spending, improved worker productivity, and other benefits. 

There is also a provision in the budget whereby an “off ramp” is available in the event certain budget or economic conditions affect the minimum wage rate. If any of the following exceptions arise, there will not be an inflation increase to the minimum wage for that year: (i) the CPI-W is negative; (ii) the statewide unemployment rate increases by 0.5% or more; and (iii) total statewide nonfarm employment decreases.  

Although the NYS Department of Labor’s various wage orders remain in effect as currently drafted, we anticipate that the DOL will promulgate increases to certain items, such as the minimum salary threshold for exempt employees and meal and tip credits. BakerHostetler will continue to monitor any developments in this space.

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