New Year, New Wage: Are You Ready?
By: Elizabeth E. Schlissel, Partner, FRB Labor & Employment Group, and Felicia Fortel, Law Clerk
On January 1, 2026, New York's minimum wage will increase to $17.00 per hour in New York City, Long Island, and Westchester County, and to $16.00 per hour in the rest of the state. These increases apply to all covered employers, and hospitality cash wages and tip credits also increase. New York's state statutory thresholds for the executive and administrative exemptions also increase on the same date. Beginning in 2027, the minimum wage will be adjusted annually based on inflation under a statutory indexing formula. Employers must prepare now to ensure full compliance and avoid costly penalties and litigation.
Minimum Wage Rates Are Not One-Size-Fits-All
Employers are responsible for correctly classifying each employee and paying them the correct minimum wage rate. New York sets different rates based on employee category and location. Failure to apply the correct rate for each employee can expose employers to significant liability.
|
Location |
Minimum Wage |
Tipped Service Employees (Cash/Tip Credit)* |
Tipped Food Service Workers (Cash/Tip Credit)* |
|
NYC, Long Island, Westchester |
$17.00 |
$14.15 / $2.85 |
$11.35 / $5.65 |
|
Remainder of New York State |
$16.00 |
$13.30 / $2.70 |
$10.70 / $5.30 |
*Tip credits are available only to hospitality employers and only if all statutory conditions are met; if tips fall short in a workweek, employers must make up the difference. Fast-food worker rates are now aligned with the general minimum wage.
Administrative and Executive Salary Exemption Threshold Increases
The salary threshold for exempt salaried employees classified in an administrative or executive capacity is also increasing on January 1, 2026.
|
|
2025 Weekly Minimum |
New 2026 Weekly Minimum |
|
NYC, LI, & Westchester |
$1,237.50 ($64,350/yr) |
$1,275.00 ($66,300/yr) |
|
Remainder of New York State |
$1,161.65 ($60,405.80/yr) |
$1,199.10 ($62,353.20/yr) |
Employers should note that New York does not have its own salary threshold for exempt employees classified under the professional exemption. Employees classified under the professional exemption must meet the federal salary threshold of $684.00 per week ($35,568.00 per year).
What Should Employers Do Now?
Make sure your first 2026 payroll reflects these new rates, your exempt salaries meet the higher thresholds, and your tip-credit practices comply with the hospitality rules and regulations. Hospitality employers must issue new wage notices when wage rates change; other employers can show increases on the next wage statement. Lastly, employers should ensure that their wage posters accurately reflect the new minimum wage rates. A little prep now helps employers avoid costly fixes later.
If you have any questions regarding these new minimum wage increases, please email Elizabeth E. Schlissel at eschlissel@frblaw.com.
This alert is for informational purposes only and does not constitute legal advice. It does not create an attorney–client relationship, and you should consult qualified counsel regarding your specific circumstances.