Jobs decline prompts freeze in state minimum wage
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New York won't be able to increase its minimum wage as scheduled on Jan. 1, 2027, after the state's economy missed a key jobs benchmark that freezes the minimum wage.
Under the state's existing law, that means the minimum wage starting Jan. 1 will remain $17 per hour in New York City, Long Island and Westchester County and $16 an hour for the rest of the state.
Gov. Kathy Hochul, however, is proposing to change the state's minimum wage law and is telling employers to be prepared to increase the minimum wage by as early as March 1, 2027.
The state's minimum wage has been tied to inflation since the 2023 state budget, when the state Legislature approved two guaranteed minimum wage increases in 2025 and 2026. Starting in 2027 the minimum wage is supposed to be tied to the rate of change in the consumer price index unless one of three conditions is met:
– if the consumer price index change is negative,
– if the three-month moving average of the state's seasonally adjusted unemployment rate for the most recent measurement ending on July 31 each year increases by a half of a percentage point or more compared to its low point in the prior year; and
– if seasonally adjusted total non-farm employment in April and the seasonally adjusted non-farm employment in July decreased from the seasonally adjusted non-farm employment measured in January of each year. If the number of jobs recorded in July is lower than what was recorded in both January and April, the state is required to hold the minimum wage steady.
Over the past year, New York recorded more than 10 million jobs in January – the highest number in state history, according to both the U.S. Bureau of Labor Statistics and the state Department of Labor. By April, the number of jobs had decreased to 9.97 million, increased in May but then dropped again by July to 9.96 million jobs. Under the 2023 state minimum wage statute, that triggers a freeze in the minimum wage.
"Governor Hochul has proposed a change to the law that could allow minimum wage rates to rise with inflation starting March 1, 2027, if the Legislature approves it. Employers should be aware of this potential change and plan ahead," the state Labor Department website states.
Under Hochul's proposal, the minimum wage would go to $17.60 an hour in New York City, Long Island and Westchester County and $16.55 an hour for the rest of the state if state lawmakers agree to her proposal.
Hochul, according to the Albany Times Union, wants to change the law to freeze the minimum wage if the monthly employment decreases .25% leading up to the July employment report, with the percent of loss measured using the median rate in July, April and January. Legislative text has yet to be filed with the state Legislature. The legislature can't act on the proposal – unless a special session is called – until the next session begins in January. It's not known if Hochul will propose the legislation as part of the state budget or as a stand-alone bill.