On January 1, 2026, the minimum wage will increase to $17.00 per hour for employees located in New York City, Long Island, and Westchester County, and to $16.00 per hour for employees in the remainder of New York State.
Beginning on January 1, 2027, increases to the minimum wage rates will be based on inflation using a three-year average of the Consumer Price Index for Urban Wage Earners and Clerical Workers (“CPI-W”). The State labor commissioner is directed to publish the adjusted minimum wage rate no later than October 1st each year, with the new rates taking effect the following January 1st.
In addition, effective January 1, 2026, the annual salary threshold for certain overtime exemptions will increase to $66,300.00 (an increase from $64,350.00) for employees located in New York City, Long Island and Westchester County. Employees in the rest of the state will see an increase to $62,353.20 (an increase from $60,405.80).
Also on January 1, 2026, the tip credit in New York will increase for both food service and service employees. For food service workers, the tip credit will be $5.65 in NYC, Long Island, and Westchester County, and $5.30 in the rest of the state. For service employees, the tip credit will be $2.85 in NYC, Long Island, and Westchester County, and $2.70 in the rest of the state.
It is recommended that employers prepare to implement these changes by January 1, 2026, and review the exemption statuses of their employees in light of the updates. Should you have any questions regarding the increases, please contact Ali Law Group.
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