Governor Announces Proposal to Index the Minimum Wage

Earlier this month Governor Hochul included in her State of the State Message a proposal to automatically increase the minimum wage. The Governor cited difficult economic conditions due to inflation and other factors that are eroding the value of the current minimum wage as the rationale for her proposal. Indexing the minimum wage to inflation, she asserted, will ensure that the purchasing power of workers’ wages aren’t eroded year over year. Under the outline of the Governor’s plan, after reaching $15 per hour, each region’s minimum wage will increase consistent with the year-over-year Consumer Price Index. To ensure that no single-year increase would threaten employment, annual increases would be capped, and an “off-ramp” would be available in the event of certain economic conditions, according to the Governor’s announcement.

Our understanding is that this proposal preserves the tip credit for foodservice workers, but increases it at the same rate as the general minimum wage. Full details of the proposal will be included in the Executive Budget which will be released on February 1st. We’re withholding our evaluation of the plan until we see the details. Regardless of the Governor’s proposal, the most progressive members of the legislature are embracing legislation to eliminate the cash wage for tipped foodservice workers so we’re gearing up for a fight in the weeks ahead.