On December 27, 2023, Governor Kathy Hochul announced an increase in New York State’s minimum wage, which took effect on January 1, 2024. This move was part of a multi-year plan designed to raise the minimum wage and adjust or “index” it to inflation. The change was implemented to benefit hundreds of thousands of minimum-wage workers across the state, providing them with a wage that better aligns with the rising costs of living.
Minimum Wage Increases: A Closer Look
The agreement between Governor Hochul and the New York State Legislature initially established a new minimum wage of $16 per hour for New York City, Westchester, and Long Island, while the rest of the state increased its minimum wage to $15 per hour beginning in 2024.
As part of the Fiscal Year 2024 Budget, Governor Hochul secured an agreement to increase the state’s minimum wage through 2026, with indexing to inflation starting in 2027. Following the initial increase in 2024, in 2025 and 2026, the minimum wage will incrementally increase by $0.50 each year. From 2027 onwards, the annual increase will be determined by the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) for the Northeast Region of the United States. The indexing method ensures that the minimum wage keeps pace with inflation and allows workers to maintain the purchasing power of their wages.
Minimum Wage Schedule
The new minimum wage plan implements the following increases in wages until the indexing method takes effect in 2027:
- January 1, 2024: $16/hour (NYC, Long Island, Westchester) | $15/hour (Rest of NY)
- January 1, 2025: $16.50/hour (NYC, Long Island, Westchester) | $15.50/hour (Rest of NY)
- January 1, 2026: $17/hour (NYC, Long Island, Westchester) | $16/hour (Rest of NY)
Impact and Benefits of the Increase
Indexing the minimum wage to inflation aims to sustain the purchasing power of workers over time. Research indicates that these increases overwhelmingly benefit low-income workers, especially women and people of color, who represent a significant portion of minimum-wage workers. This initiative aligns New York with eighteen other states that either currently tie their minimum wage to inflation or plan to do so, with three of these states having a minimum wage at or above $15 in 2023.
How to Report Missing Wages
The New York State Department of Labor has been actively promoting awareness of the minimum wage increase and encouraging affected workers to report any discrepancies. Through digital outreach by social media, newsletters, and direct engagement with partnering organizations, the Department aims to inform workers about their increased entitlements. Minimum-wage earners who do not receive the increase are encouraged to file a wage complaint directly on the New York State Department of Labor’s website.
Conclusion
This minimum wage increase addresses some of the immediate financial concerns of low-wage workers and also aligns with broader economic benefits associated with higher minimum wages. With this step, New York hopes to see the positive impact that thoughtful wage policies can have on both workers and the economy at large. Contact a member of our team to learn more.
