Literally just hours after California’s Governor Jerry Brown announced that the state minimum wage was increasing to $15 per hour by 2022, the Governor of New York, Andrew Cuomo held a press conference to announce that the Big Apple was following suit. This is great news for the 8.8 million workers in CA and NY who can expect their current wages to rise over the next couple of years—a movement that’s long overdue since the fast food worker strikes in 2012. How will this impact the perception of workplace earnings and will other states push for increased minimum wages now?
How employees view their wages now
The 2016 Payscale Compensation Best Practices report revealed a wide gap between what employees view as fair pay vs. what employers think they are offering. Nearly 73% of employers believe they are paying employees adequately, but only 36% of employees think so. There’s a good chance that this increase in minimum wage will help employers to improve the perception of employees, even though it comes as an involuntary move.
Tipped workers deserve a raise too
It’s important to point out that Governor Cuomo initially requested that not only regular hourly employees get the higher minimum wage, but also tipped workers—a group who have typically earned sub-minimum wages and their livelihoods relied on the generosity of patrons. However, the hourly wage for tipped employees in NY is expected to cap out at $10-11 per hour (up from $7.50) and they will still need to generate tips in order to catch up with other hourly workers. The exception is for NYC cooks and dishwashers who will enjoy the $15 per hour rate by the end of 2018, and there are some guidelines for employers based on company size.
Historic update to the FMLA
And that’s not all. The Cuomo bill also updates the Family and Medical Leave Act, which provides up to 12 months of employee-funded leave for those who must care for newborns, ailing family members, or recovering members of the active military. In a day and age when companies are striving to provide better benefits to employees in order to retain a strong workforce, this comes as good news. You can read more about how companies like Twitter, Microsoft, and Adobe are setting the bar high for employee perks and benefits.
What’s happening in other states?
Already, other states are preparing for a wave of minimum wage increases. As of this article, 29 states and the District of Columbia have set their minimum wage above the federal level of $7.25 per hour, and 8 states have increase wages for tipped workers to equal hourly employee’s earnings. Hopefully, between the increase in wages and the growing trend of the nation’s top employers to provide above-average benefits, the way that employees view their earnings will become more positive.
Find out how your company can find ways to comply with changes in the law concerning minimum wage increases and compensation planning.
Curious about whether the federal minimum wage should increase? We have a perspective on that too.