As New York businesses gear up for the bustling holiday season and the anticipated impact of the upcoming presidential election, it is crucial to take stock of the array of new labor laws and regulations set to take effect at the beginning of 2025. These legislative changes will not only reshape workplace practices across various sectors but also require employers to adjust their compliance strategies to ensure adherence to the evolving legal landscape.
Wage and Hour Law Changes
New York employers have become accustomed to annual adjustments in wage and hour laws, and 2025 will be no exception.
Minimum Wage Increases
In 2023, Governor Kathy Hochul signed a pivotal piece of legislation that initiates a three-year period of annual minimum wage increases, transitioning to a market-based adjustment mechanism thereafter. Starting January 1, 2025, the hourly minimum wage for employees in New York City, Westchester, and Long Island will rise from $16 to $16.50, with a subsequent increase to $17 scheduled for January 1, 2026. Meanwhile, employees in the rest of New York State will see their minimum wage increase from $15 to $15.50 in 2025, and further to $16 in 2026.
These new minimum wage rates will apply to all New York employers, regardless of size, marking a shift from the previous system that considered employee headcount. In a forward-looking approach, the legislation also mandates that minimum wage rates for 2027 and beyond will be tied to the three-year average of the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) for the northeast region. The New York Department of Labor (NYDOL) will oversee economic conditions and adjust the minimum wage accordingly, ensuring that any increases are communicated to employers no later than October 1 of the previous year.
Increases to Overtime Exemption Salary Thresholds
In addition to minimum wage adjustments, the NYDOL has revised the salary thresholds for overtime exemptions. Currently, employees in New York City, Long Island, and Westchester can qualify for the executive or administrative exemption if they earn at least $1,200 per week ($62,400 annually). This threshold will increase to $1,237.50 per week ($64,350 annually) on January 1, 2025, and further to $1,275 per week ($66,300 annually) in 2026. For those in the remainder of New York State, the current threshold of $1,124.20 per week ($58,458.40 annually) will rise to $1,161.65 per week ($60,405.80 annually) in 2025 and to $1,199.10 per week ($62,353.20 annually) in 2026.
New Sick Leave Regulations: Paid Prenatal Leave and Conclusion of COVID Paid Sick Leave
One of the most groundbreaking changes in the 2025 budget is the introduction of paid prenatal leave, making New York the first state to implement such a policy. Beginning January 1, 2025, employers will be required to provide at least 20 hours of paid prenatal personal leave each year for eligible employees. This leave can be taken in hourly increments for health care services related to pregnancy, in addition to existing sick leave entitlements. Eligible employees may be entitled to up to 60 or 76 hours of total paid leave, depending on their employer’s size.
In a significant shift, COVID-19-related paid sick leave will no longer be available after July 31, 2025, under the Emergency Leave Law. However, employees will still be able to utilize other forms of paid leave, such as the New York Paid Sick Leave, for COVID-19-related purposes.
Retail Workplace Safety Law
In an effort to enhance workplace safety, especially in retail environments, New York has enacted a law that mandates workplace violence prevention policies and training. Effective March 4, 2025, employers with at least ten retail employees must establish written policies that identify potential risks of workplace violence and outline prevention methods. Training on violence prevention, de-escalation techniques, and emergency procedures will be required for all covered employees upon hiring and annually thereafter.
An essential aspect of this legislation includes the installation of panic buttons, a requirement set to take effect on January 1, 2027, for employers with 500 retail employees or more nationwide. This feature aims to enhance employee safety and create a responsive environment to potential threats.
conclusion
As 2025 approaches, New York employers must navigate these significant changes in labor law to ensure compliance and protect their workforce. The interplay of new minimum wage rates, adjusted overtime exemption thresholds, and enhanced workplace safety regulations will require employers to reassess their operational practices and employee policies.
Staying informed and proactive will be key to successfully adapting to these changes while promoting a safe and equitable workplace. As the landscape of labor laws continues to evolve, businesses in New York have the opportunity to lead by example in fostering an inclusive and supportive work environment.
The upcoming changes to labor laws in New York represent a critical evolution in protecting workers’ rights and ensuring fair compensation. Employers must prioritize compliance as they prepare for 2025, navigating the complexities of new regulations while continuing to support their employees’ well-being and safety.
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