(3) Remainder of state (outside of New York City and Nassau, Suffolk and Westchester counties)

$9.70 per hour on and after December 31, 2016;

$10.40 per hour on and after December 31, 2017;

$11.10 per hour on and after December 31, 2018;

$11.80 per hour on and after December 31, 2019;

$12.50 per hour on and after December 31, 2020;

$13.20 per hour on and after December 31, 2021;

$14.20 per hour on and after December 31, 2022.

Section 190-2.1(c) of 12 NYCRR is amended to read as follows:

(c) Remainder of state (outside of New York City and Nassau, Suffolk and Westchester counties)

$9.70 per hour on and after December 31, 2016;

$10.40 per hour on and after December 31, 2017;

$11.10 per hour on and after December 31, 2018;

$11.80 per hour on and after December 31, 2019;

$12.50 per hour on and after December 31, 2020;

$13.20 per hour on and after December 31, 2021;

Statutory Authority: Labor Law Sections 21(11), 652, 656, and 673.

Legislative Objectives: This rulemaking implements the public policy objectives that the legislature sought to advance by enacting a statutory scheme to increase the minimum wage in several regions across the State. Chapter 54 of the Laws of 2016 provided for increases in the minimum wage and set the rates and schedule for increases ranging from $2.00 per year in New York City to $0.70 per year upstate, on the following schedules: (1) $11.00, $13.00 and $15.00 on December 31 of each year from 2016-18, respectively, for work performed in New York City for large employers of 11 or more employees; (2) $10.50, $12.00, $13.50 and $15.00 on December 31 of 2016-19, respectively, for work performed in New York City for small employers of 10 or less employees; (3) $10.00, $11.00, $12.00, $13,00, $14.00 and $15.00 on December 31 of 2016-21, respectively, for work performed in the counties of Nassau, Suffolk and Westchester; and (4) $9.70, $10.40, $11.10, $11.80 and $12.50 on December 31 of 2016-20 for work performed in the rest of the state, with additional increases for the rest of the state to determined annually by the Division of Budget starting in 2021 and continuing until the rate reaches $15.00. The Commissioner of Labor (Commissioner) has received a report from the Division of Budget, as provided for in Section 652(6) of the Labor Law, recommending that the minimum wage rate outside of New York City, Nassau, Suffolk and Westchester counties be increased from $13.20 per hour to $14.20 per hour on and after December 31, 2022. Section 652 directs the Commissioner to act on such report pursuant to Section 656 of the Labor Law and to modify existing wage orders without a public hearing. Section 673 of the Labor Law states that the minimum wage rate for Article 19-A is established by Section 652.

Needs and Benefits: The regulations implement increases in the minimum wage rates contemplated and required by Chapter 54 of the Laws of 2016, in line with the actions of the Division of Budget and according to the statutory formulas set forth in Labor Law § 652 at subdivisions 2, 4, and 5, as amended. Specifically, that legislation increased the basic hourly minimum wage from its then-current rate of $9.00 up to $15.00 on the phased-in schedules set forth at subdivision 1 of Labor Law § 652 and summarized above and subdivisions 2, 4 and 5 of Labor Law § 652 specify statutory formulas for increasing various other rates set forth in the regulations by reference to the above-referenced minimum wage increases.

The regulations will benefit employers and employees by specifying the exact dollar amounts that result from those statutory formulas to facilitate compliance with statutory increases. Employees will benefit from increases in those rates that specify additional pay required under certain circumstances, while employers will benefit from increases in those rates that specify allowances that employers can use as credits towards partial satisfaction of the minimum wage. The regulations do not establish or eliminate any requirements for additional pay or opportunities for allowances that employers may claim, but simply establish the new dollar amounts that result from the legislation enacted in 2016, and the report of the Director of the Budget in accordance therewith. Such report recommends the Upstate minimum wage increase to $14.20 per hour on December 31, 2022. A copy of this report is available on the Department’s website at https://dol.ny.gov/minimum-wage-0. This rulemaking is a step towards implementing this legal process provided for in Section 652 of the Labor Law.

Costs: The cost of these rules to the regulated community is related to the cost of the increase in the minimum wage scheme enacted by the legislature. There will be costs associated with providing the increase in the minimum wage, and minimal initial additional cost associated with recordkeeping.

Local Government Mandates: None. Federal, state, and municipal governments and political subdivisions thereof are excluded from coverage under 12 NYCRR Part 190.

Paperwork: The rule imposes no new or additional paperwork requirements.

Duplication: This rule exceeds the federal minimum wage requirements, but follows the requirements set by the New York State Legislature.

Alternatives: These amendments made are required by law and thus there are no alternatives to amending these regulations beyond what was recommended by the Division of Budget.

Federal Standards: This rule implements the minimum wage and requirements set forth in New York law that exceeds the federal minimum wage. There are no other federal standards relating to this rule.

Compliance Schedule: The regulated community will be required to comply with this regulation on and after December 31, 2022.

Effect of Rule: All small businesses, but no local governments, are potentially affected by the changes in these regulations.

Compliance Requirements: There are no changes in the reporting or record-keeping requirements regarding the minimum wage. During the phase-in period, when different minimum wage rates apply in different regions, employers who choose to pay different hourly rates for hours worked in different regions for a given employee during a single payroll period will have to track the hours worked at each rate. The requirement to track hours worked at different rates is not a new requirement imposed by this rulemaking and is based on the employer’s decision to pay different rates for different hours. That requirement can be avoided by paying the same hourly rate for work performed in two regions, as long as that hourly rate does not fall below the minimum rate for either region.

Professional Services: No professional services would be required to effectuate the purposes of this rule.

Compliance Costs: Regulations do not establish or eliminate any requirements for additional pay or opportunities for allowances that employers may claim, but simply establish the new dollar amounts that result from the legislation enacted in 2016, and the report of the Director of the Budget in accordance therewith. Such report recommends the Upstate minimum wage increase to $14.20 per hour on December 31, 2022. A copy of this report is available on the Department’s website at https://dol.ny.gov/minimum-wage-0.

Economic and Technological Feasibility: Compliance with these regulations will be economically and technologically feasible because these regulations simply adjust existing rates, without imposing new, or altering existing, requirements or procedures for complying with minimum wage requirements.

Minimizing Adverse Impact: The increases to the minimum wage rates are required by law, which minimizes the adverse impact on small businesses by providing a slower phase-in schedule and lower minimum wage rates during that phase-in schedule, as set forth above. In addition, small businesses may choose to take steps to minimize their costs by claiming available allowances for items such as meals and lodging and by avoiding practices that trigger additional pay requirements for certain work shifts and uniform (clothing) practices.

Small Business and Local Government Participation: The increases in minimum wage rates were enacted by the legislature following public hearings held by an administrative wage board across the state in 2015 that resulted in establishment of a $15.00 minimum wage with different phase-in periods for New York City and the rest of the state for fast food chains. At those hearings, some small businesses joined workers, elected officials, public interest groups and academics in calling for a $15.00 minimum wage, and some small businesses joined others in calling for any future increases in the minimum wage to be applied across the board to employers in all industries, and to take into account differences between large and small employers. After administratively adopting a $15.00 minimum wage for fast food chains with different phase-in schedules for New York City and the rest of the state, the state enacted statutory increases for all industries, with different phase-in schedules for three regions, and different phase-in schedules for work performed in New York City for large and small employers and those proposals were the subject of extensive public dialogue and input leading up to the enactment in 2016. Additional participation will be afforded through the public comment period for these regulations, and through direct outreach from the Department of Labor to impacted communities and/or associations representing such communities. The Department will also be posting notice of these changes in at least ten (10) newspapers of general circulation in the state in accordance with Labor Law Section 656.

1. Types and estimated numbers of rural areas: These rules apply to all private employers in all areas of the state.

2. Reporting, recordkeeping and other compliance requirements; and professional services: There are no changes in the reporting or record-keeping requirements regarding the minimum wage and no professional services will be required to comply with this rule. During the phase-in period, when different minimum wage rates apply in different regions, employers who choose to pay different hourly rates for hours worked in different regions for a given employee during a single payroll period will have to track the hours worked at each rate. The requirement to track hours worked at different rates is not a new requirement imposed by this rulemaking and is based on the employer’s decision to pay different rates for different hours. That requirement can be avoided by paying the same hourly rate for work performed in two regions, as long as that hourly rate does not fall below the minimum rate for either region.

3. Costs: These rules do not impose any additional costs separate and apart from the costs imposed by the legislature in increasing minimum wage rates and in establishing statutory formulas for adjusting amounts set forth in these rules. Such compliance costs, however characterized, do not exceed the cost of reviewing and increasing pay rates consistent with the statutory increases implemented by this rulemaking.

4. Minimizing adverse impact: The increases to the minimum wage rates are required by law, but rural businesses may choose to take steps to minimize their costs by claiming available allowances for items such as meals and lodging and by avoiding practices that trigger additional pay requirements for certain work shifts.

5. Rural area participation: The increases in minimum wage rates were enacted by the legislature in 2016 following public hearings held by an administrative wage board across the state in 2015 that resulted in establishment of a $15.00 minimum wage with different phase-in periods for New York City and the rest of the state for fast food chains. At those hearings, some businesses joined workers, elected officials, public interest groups and academics in calling for a $15.00 minimum wage, and some businesses called for any future increases in the minimum wage to be applied across the board to employers in all industries. After administratively adopting a $15.00 minimum wage for fast food chains with different phase-in schedules for New York City and the rest of the state, the state enacted statutory increases for all industries, with different phase-in schedules for three regions, and different phase-in schedules for work performed in New York City for large and small employers and those proposals were the subject of extensive public dialogue and input leading up to the enactment in 2016. Additional participation will be afforded through the public comment period for these regulations.

6. Initial Review of Rule: The Department will review the rule within the third calendar year after filing.

1. Nature of Impact: These regulations conform existing Wage Orders to the statutory increases in the New York State minimum hourly wage rate required by Labor Law § 652 and the amendments thereto made by Chapter 54 of the Laws of 2016.

2. Categories and numbers affected: These regulations are required by statute.

3. Regions of adverse impact: These regulations will track the regions defined by the statutory increases and will provide the same statutory phase-in schedules that provide additional time for employment in upstate regions, and in downstate regions outside of New York City on the following schedules: (1) $11.00, $13.00 and $15.00 on December 31 of each year from 2016-18, respectively, for work performed in New York City for large employers of 11 or more employees; (2) $10.50, $12.00, $13.50 and $15.00 on December 31 of 2016-19, respectively, for work performed in New York City for small employers of 10 or less employees; (3) $10.00, $11.00, $12.00, $13,00, $14.00 and $15.00 on December 31 of 2016-21, respectively, for work performed in the counties of Nassau, Suffolk and Westchester; and (4) $9.70, $10.40, $11.10, $11.80 and $12.50 on December 31 of 2016-20 for work performed in the rest of the state, with additional increases for the rest of the state to determined annually, starting in 2021 and continuing until the rate reaches $15.00. The Division of Budget considered several economic factors and information in its report, which aligns with the regional distinctions made by the legislature in adopting Section 652(6) of the Labor Law in 2016 as part of this overarching scheme towards the minimum wage reaching $15.00 per hour in all regions of the State.

4. Minimizing adverse impact: The increases to the minimum wage rates are required and in accordance with the process established by the legislature in adopting Chapter 54 of the Laws of 2016, but employers may minimize their costs and impact on jobs, by claiming available allowances for items such as meals and lodging and by avoiding practices that trigger additional pay requirements for certain work shifts.

5. Self-employment opportunities: It is not anticipated that this rule will have a measurable impact on opportunities for self-employment.

6. Initial review of the rule: The Department will review the rule within the third calendar year after filing.