New York State Minimum Wage Increase Takes Effect January 1, 2024
This is a reminder that the New York State Minimum Wage Increase has gone into effect. Governor Hochul signed Senate Bill S4006C into law on May 3, 2023, increasing New York’s minimum wage in annual increments beginning January 1, 2024.
Minimum Wage Increases
As of January 1, 2024, New York State’s minimum wage will increase to $16 per hour in New York City and the counties of Nassau, Suffolk and Westchester, and to $15 per hour everywhere else in the state. Both rates will increase by an additional $0.50 on both January 1, 2025 and January 1, 2026.
Unlike prior increases, the new rates do not differ based on employer size and lump together the rates for New York City, counties on Long Island and Westchester County. Beginning in January 2027, the minimum wage will increase annually according to the Consumer Price Index.
Exempt Salary Thresholds
To be classified as exempt from New York’s overtime requirements, executive and administrative employees must meet minimum salary requirements and satisfy certain duties tests. For these two exemptions, New York State sets the weekly minimum salary requirement at 75 times the hourly minimum wage.
As a result, with the increase of minimum wage, the minimum salary for exemption as an executive or administrative employee also increases from $1,125 per week to $1,200 per week ($62,400 annualized) in New York City, Nassau, Suffolk, and Westchester counties and from $1,064.25 per week to $1,124.20 per week ($58,458.40 annualized) elsewhere in the state.
Note, there is also a professional exemption under New York State law. For the professional exemption, employees must satisfy certain duties tests, but there is no minimum salary requirement under state law. Federal law currently establishes a minimum salary of $684 per week for the professional exemption.
Minimum Wage Increases in New Jersey and Connecticut
As of January 1, 2024, New Jersey’s minimum wage will also increase for most employees to $15.13 per hour. Under New Jersey State law, some employers are allotted more time to reach the $15.13 per hour minimum wage increase. For example, employees of seasonal employers and small businesses (fewer than six employees) will have until 2026 to pay their workers at least $15 per hour. The minimum hourly wage for these employees will increase to $13.73 per hour beginning January 1, 2024, an increase from $12.93 per hour.
As of January 1, 2024, Connecticut’s minimum wage also will increase to $15.69 per hour as a result of a new annual economic index adjustment. Thereafter, Connecticut’s minimum wage will be adjusted annually according to the U.S. Department of Labor’s calculation of the employment cost index.
What this Means for Employers
Employers operating in the Tri-State area employing minimum wage workers should be prepared to comply with the mandated minimum wage increases.
New York employers with exempt executive and administrative employees should review salaries to determine whether they continue to meet the 2024 thresholds for exemptions from overtime or whether these employees will need to reclassified as nonexempt employees entitled to overtime pay.