New York State Minimum Wage Increase Takes Effect
The state of New York implemented a meaningful minimum wage increase on December 31, 2015, following updated state legislation. This law directly improved pay for many hourly employees, especially workers in service and tipped roles. The minimum wage increased from $8.75 to $9.00 per hour, placing New York $1.75 above the federal minimum wage of $7.25.
Who Was Most Affected?
The minimum wage increase mainly supported lower-paid professionals including:
- Retail and store workers
- Manual laborers and shift workers
- Customer service teams
- Service professionals receiving tips
- Food and hospitality staff
Although this rise may sound small, it set the foundation for future wage reforms and created immediate payroll adjustments for both employers and employees.
Major Reforms for Tipped Service Advisors and Service Workers
Service staff, especially in food and automobile-related shops, often rely on tip income. Employers can apply a tip credit, allowing them to pay a lower hourly base so long as tips compensate the difference to reach minimum wage. However, lawmakers restricted how large this credit could be.
For service employers and restaurants, the maximum tip credit was reduced:
- From $3.50 per hour
- To $1.50 per hour
As result, the required minimum base pay for tipped workers rose:
- From $5.00 per hour
- To $7.50 per hour
This shift ensured tipped employees received a stronger guaranteed hourly component, regardless of customer volume or slow business days.
Overtime Wage Impact
Both federal and state law mandate that overtime must be paid at 1.5× hourly rate. Based on the new $9.00 minimum wage, the updated 2015 overtime rate became:
- $13.50 per hour, up from $13.13
Even though the DOL announced that withdrawal did not change legal responsibilities, many automotive and food employers had to revisit payroll calculations, overtime approval processes, and worker classification assumptions.
Workplace Classification Still Matters
Interpretations from agencies like the United States Department of Labor shaped employer policy for years. Still, courts now rely more on job duties than old handbook references. Employers using outdated assumptions may face pay misclassification claims.
What Employers Must Do Now
To maintain compliance and avoid liability, companies should update:
Dispute-resolution strategy with legal support
Pay benchmarking systems
Tipped worker payroll models
Overtime calculations
Internal wage-classification reviews
If you have questions about New York’s new minimum wage rate, contact our office to speak with an experienced attorney.
