New York City and its suburbs could hike wages to $17 an hour

The minimum wage for foodservice operators and other employers in and around New York City would rise to $16 next year and $15 elsewhere in the Empire State under a budget deal hammered out Thursday between state lawmakers and Gov. Kathy Hochul.

Under the agreement, the pay floor would rise by 50 cents throughout New York in both 2025 and 2026. Starting in 2027, the minimum would be automatically adjusted annually to keep pace with changes in the state’s cost of living.

The plan leaves the state's tip credit in place, thwarting the unions that have been leaning heavily on state officials to require that restaurants pay servers and bartenders the full minimum wage.

The increases would build off the current minimum wages of $15 in New York City, Long Island and Westchester County, and $13.20 elsewhere in the state.

New York would end up with one of the highest minimum wages in the nation, though many foodservice operators say they already pay more than $16 an hour. The industry’s traditional fear has been that an increase prompts employees to demand a raise so they remain at their current differential from the mandated minimum.

The plan also underscores that $15 an hour, a wage many eateries once said they could never afford, is quickly fading in the rearview mirror, a vestige of the past.

In New York politics, the annual state budget serves as the state government’s legislative and regulatory plan for the year ahead. It is seldom finalized on time, and usually involves considerable give and take between legislative and executive leaders.

Once it is agreed upon, lawmakers draft legislation to move forward with the settled-upon policy initiatives.

Because Democrats control the state Senate and House in addition to the governor’s mansion, the legislation usually passes as planned.