Minimum wage in New York

August 30th, 2006 Posted by Justine

Currently the minimum wage in New York is $6.75 per hour and will increase to $7.15 per hour effective January 1, 2007.  The New York Legislature passed the General Industry Minimum Wage Act that provides for the minimum wage to increase for all employees in the state, including domestic workers with certain specified exceptions.  In addition certain jobs in the restaurant, hotel, and building service industry as well as miscellaneous industries and occupations are covered by the provisions and include payment of the hourly rate plus overtime and allowances.

The Act provides for a three step process that began in 2005 at $6.00 per hour and increased seventy-five cents per hour in 2006 with a final increase of forty cents per hour in 2007 to $7.15 per hour.  The minimum cash wage for tipped food services workers grew from $3.85 per hour in 2005 to $4.35 per hour in 2006 and will increase to $4.60 per hour in 2007.  As a result the maximum tip credit for tipped food service workers is based on a forty cent final increase from $2.15 to $2.55 in 2007.  The state of New York does not have a youth/training minimum wage so these workers will be paid the full minimum wage rate.

The General Industry Minimum Wage Act was the result of Governor George Pataki’s veto override by both the New York Assembly and Senate. 

It has been estimated that the increase in the minimum wage will affect at least 700,000 workers who earn between $5.15 per hour and $7.10 per hour.  Some economists predict that other wages will rise as well.  This is known as the “pushup effect” where wages also tend to rise for people making a small amount over the minimum wage.  As a result economist predict that another 500,000 New York workers who are earning $7.00 per hour to $8.00 per hour will also see their hourly wage increase.

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