New York and California have committed to introducing a statewide $15 an hour minimum wage.
In New York, the minimum wage will increase gradually by between $0.70 and $2 each year, depending on the size of the workforce and where in the state employees are based. Employees that work for organisations with 11 or more staff in New York City will see their wage rise from $11 at the end of this year to $15 an hour at the end of 2018. Workers in counties such as Nassau, Suffolk and Westchester will reach $15 an hour at the end of 2021.
California is also taking a phased approach; organisations with 26 or more employees will be required to pay $10.50 an hour from January 2017, gradually rising each year until reaching $15 in January 2022. Increases for employees at firms with 25 staff or less will be implemented a year later in each case.
Charles Thompson, shareholder at labour and employment law firm Ogletree Deakins, said: “These measures can, and will, impact employers in other states. Progressive groups in some cities and states will push for increased minimum wages with renewed vigour. Some states, however, will do what they can to prevent any increase.
“For example, North Carolina recently barred all counties and cities from imposing their own minimum wage. Alabama also recently passed a law that voided Birmingham’s minimum wage, which was higher than the federal minimum wage.”
The $15 minimum wage was announced as part of New York’s 2016-17 budget, which also included a paid family leave programme. This will enable eligible employees to take up to 12 weeks’ paid leave to care for a child, seriously ill family member, or to relieve family pressures if someone is called to active military service. The programme will be phased in from 2018 and will be funded through employee payroll deduction at no cost to employers.
Meanwhile, San Francisco has committed to legislating for employer contributions towards fully paid parental leave. At present, eligible employees receive 55% of their pay for six weeks’ leave, which is funded through employee payroll contributions.
The new legislation will require employers with a workforce of 20 or more to contribute the remaining 45%. This will be phased in from 2017, according to the size of the organisation, and will apply to birth parents and adoptive parents. It will not apply where an employer already provides benefits that are equal to, or in excess, of the legislation’s contribution requirements.
Thompson added: “First, before panicking, [San Francisco’s employers should] calculate [their] likely exposure by looking back and counting the number of employees who actually took California-paid parental leave for birth, adoption, and baby-bonding. If the employer increases that number by just a few persons, the employer likely has calculated its full liability once the law takes effect.
“Second, employers are going to have to make cost-benefit decisions concerning the dollar and administrative cost of the new ordinance versus expanding a business in San Francisco, moving a business out of the city, and/or hiring or laying off employees.”