A breakdown of NY's complicated $15 wage agreement

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Restaurateurs and other employers with locations throughout New York may have a tough time computing what they’ll be required to pay hourly workers under the wage increases that lawmakers agreed last night to pass today.

Under the budget deal that was hammered out, restaurants and other businesses in New York City with more than 10 employees will be required to raise their hourly wages to $11 by the end of this year. The legal minimum would then rise by $2 a year to reach $15 an hour by Dec. 31, 2018.

The current minimum wage is $9 an hour.

Smaller companies would increase their lowest wage to $10.50 on New Year’s Eve and $1.50 per year thereafter until they hit $15 on Dec. 31, 2019.

Businesses in Nassau, Suffolk and Westchester Counties, the suburbs closest to New York, would be required to pay no less than $11 by Dec. 31 of this year. The minimum would then increase by $1 a year until reaching $15 on Dec. 31, 2021.

The pay floor elsewhere in the state would rise to $9.70 before this year ends, then by 70 cents per year until the minimum hits $21.50 the day before 2021 begins. At that point, increases would be set by New York’s Director of the Division of Budget in correlation to the rate of inflation until the minimum hits $15.

In what Governor Andrew Cuomo called a “safety valve” for employers, the state would start assessing the economic impact of the increases in 2019. If the hikes have hurt economic or job growth, the increase schedule would be suspended temporarily.

Proponents note that the review aspect of the budget, believed to be the first of its kind on a state level, could prevent the wage in upstate New York from ever hitting $15. 

The budget, which is almost certain to be approved today by the legislature, also requires employers to grant up to three months of paid leave to workers grappling with an extraordinary family situation like the birth of a child or the prolonged illness of a spouse. However, the pay will come from a fund generated by an employee-paid payroll tax.

Much of the details of last night’s deal have apparently yet to be resolved. For instance, does the 10-or-fewer employees threshold in New York City apply to an individual unit of a franchisee, or to the whole franchise company?

Yet the geographic variability is a certainty. A company with restaurants in New York City, Long Island and upstate New York would have three rates to meet, and they would change on different schedules.

Still, the increases fell short of Governor Andrew Cuomo’s plan to raise the minimum wage statewide to $15 by 2021. He has already pushed through an executive measure that will raise the hourly pay scale for chain fast food workers to $15.

An agreement on the wage increases came last night, hours before the state budget was set to expire at midnight. For weeks, lawmakers and Cuomo’s administration had been working passionately on a deal. The 12 a.m. deadline loomed large because the Cuomo administration has never started a new fiscal year without a budget written and approved by day one.


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