Yesterday (Monday, 4/4/16), California Governor Jerry Brown and New York Governor Andrew Cuomo both signed-off on minimum wage increases for their respective states. Governor Cuomo also signed-off on a new family paid leave policy for New York state. Here are key things employers need to know about the landmark legislation:
California's Minimum Wage Increase:
- The minimum wage in California will be increasing to $15 an hour. Implementation will be gradual.
- California’s minimum wage, currently $10 an hour, will increase next year by 50 cents per hour and to $11 by 2018. Then it will increase annually by $1 every January until 2022. After 2022, wage increases will rise annually with inflation.
- Businesses with 25 or fewer employees have an extra year to comply.
New York's Minimum Wage Increase:
- The minimum wage in New York state will be increasing to $15 an hour. It is estimated that more than 2.3 million people will be affected by the increase.
- Implementation will be gradual. Employers classified as large (more than 11 employees) in New York City and the surrounding counties (Nassau, Suffolk and Westchester) will see the largest increases the soonest.
- Large companies in NYC - $11 at the end of 2016, then another $2 each year after, reaching $15 on 12/31/2018.
- Small businesses in NYC Con- $50 by the end of 2016, then another $1.50 each year after, reaching $15 on 12/31/2019.
- Nassau, Suffolk and Westchester Counties- $10 at the end of 2016, then $1 each year after, reaching $15 on 12/31/2021.
- Workers elsewhere in NY state - $9.70 at the end of 2016, then another .70 each year until reaching $12.50 on 12/31/2020. After that date, the increase to $15 will happen on a schedule set by the Director of the Division of Budget, in consultation with the Department of Labor.
- Beginning in 2019, increases will be evaluated annually and may be suspended if economic conditions are unable to support the increase.
New York's Family Paid Leave Policy:
- Employees will be eligible for 12 weeks of paid family leave to:
- Care for an infant
- Care for a family member with a serious illness
- Address family matters related to an immediate family member’s active military service
- There will be a gradual implementation with benefit phase-in beginning in 2018 at 50 percent of an employee’s average weekly wage. When fully implemented in 2021, employees will receive two-thirds of their average weekly wage, capped at two-thirds of the statewide average weekly wage.
- The program will be funded through employee payroll deductions not employer contributions. Employee deductions will start at 70 cents per week and increase to approximately $1.40 a week.
- Employees are eligible after being employed by their employer for six months. Unlike FMLA, employees will be eligible regardless of the company’s size.
Three other states and the District of Columbia currently have paid family leave: California, Rhode Island and New Jersey. However, the program passed in New York will be one of the most robust and least restrictive.
Undoubtedly, organizations are just beginning to process these changes. As you begin to plan for them, please know, we have experience helping organizations navigate minimum wage increases, as well as other policy changes that may impact an organization’s productivity, operations and financial success. Our consultants are always happy to discuss your priorities and challenges with you. You can reach them at (800) 300-9570 or firstname.lastname@example.org.