New York State Minimum Wage to Increase Beginning in 2014

By Scott J. Wenner

Through an unusual agreement, the New York State Legislature and Governor Andrew Cuomo decided to hike New York State’s minimum wage in three steps from the current $7.25 per hour to an hourly rate of $9.00 in 2016. The minimum wage schedule looks like this:

What places the pact in the category of “unusual” is the compromise reached to ease the burden on employers of lower wage employees. Under the recently passed legislation, tax credits will be provided to employers that hire seasonal workers aged 16 to 19 who are still in school. Republican leaders contend that the subsidy is intended to protect the employment of those otherwise most likely to lose their jobs when the hikes take effect. Eligible employers would effectively receive an hourly subsidy of $0.75 when the wage rate increases to $8.00 per hour. That subsidy will increase to $1.31 per hour when the minimum wage increases to $8.75 in 2015 and will hit $1.35 per hour in 2016 when the rate of pay hits $9.00.

However, politics will be politics as several labor unions – the United Food and Commercial Workers International (UFCW) among them – have slammed the deal even though the result increases the minimum wage. Among the accusations: that the subsidy is a payoff to Wal-Mart, which stands to benefit from the tax credits “on the backs of hard-working taxpaying Americans,” for its years of making campaign contributions to New York Republicans. Wal-Mart has denied lobbying for the tax credits and the State Republican leadership denies the charge, expressing wonderment “that these unions would oppose this provision given the high unemployment rate among young New Yorkers, especially minorities.”

For questions or assistance on implementing the minimum wage increase or in seeking the tax credit after January 1, 2014, contact your Schnader lawyer.