Plan Today for New York Minimum Wage and Paid Leave Changes 

New York’s labor laws continue to evolve, and employers across NYC, Long Island, and the rest of the state need to stay one step ahead to avoid compliance surprises. With the final quarter of 2025 underway, now is the time to confirm you’ve implemented this year’s changes and prepare for another round of updates taking effect January 1, 2026.

Here’s a quick recap of what went into effect this year and a closer look at what’s next.

What Changed in 2025 

If you haven’t already adjusted payroll and policies to reflect the 2025 updates, that should be your first priority. These changes took effect January 1, 2025:

• Minimum Wage Increase: Employers in NYC, Long Island, and Westchester are required to pay at least $16.50/hour, while the rest of the state increased to $15.50/hour.
• Paid Family Leave Updates: The maximum weekly benefit rose to $1,177.32, and the employee contribution rate was set at 0.388% of wages (capped at $54.53 annually).
• Compliance Reminders: Businesses should update their paid leave notices, employee handbooks, and payroll systems to reflect these new thresholds.

If you missed any of these steps, now is the time to catch up, as the next wave of changes is already underway.

What’s Coming in 2026: Bigger Increases, Higher Costs, and New Planning Priorities

Minimum Wage Hike

Effective January 1, 2026, New York’s scheduled minimum wage increases will continue:

• NYC, Long Island & Westchester: $17.00/hour
• Rest of State: $16.00/hour

This is the final fixed rate increase before indexing begins in 2027, meaning wage rates will automatically adjust based on inflation in future years. Employers should review payroll budgets, update offer letters, and reassess contractor relationships now.

Paid Family Leave Increases

Paid Family Leave (PFL) will see significant changes next year, too:

• Contribution Rate: Rising to 0.432% of wages (up from 0.373%), with a new annual cap of $411.91 per employee.
• Maximum Weekly Benefit: Increasing to $1,228.53 (up from $1,177.32).
• NYSAWW Update: Benefits are now based on a higher New York State Average Weekly Wage of $1,833.63, influencing calculations for both contributions and payouts.

Employers must update payroll withholdings, revise employee communications, and confirm PFL policies align with the new benefit structure.

Unemployment Insurance: Relief and Higher Benefits

Due to recent state budget changes, New York will pay down its federal unemployment insurance (UI) debt in 2026. This means many employers could see lower UI tax burdens in future years. Additionally, the maximum UI weekly benefit will increase from $504 to $869, expanding support for laid-off employees.

What Employers Should Do Now

With less than three months before these changes take effect, here’s how to stay ahead:

• Update payroll systems and budgets for the 2026 minimum wage and PFL contribution increases.
• Review job offers, salary ranges, and pay scales to ensure compliance with the new wage floor.
• Communicate benefit updates to employees in advance, particularly changes to PFL contributions and maximum benefits.
• Plan for long-term budgeting as automatic inflation indexing begins in 2027.

Plan now to manage rising costs wisely. Minimum wage hikes and benefit increases don’t just affect HR; they directly influence payroll budgets, cash flow, and tax obligations. Our team helps New York businesses forecast these changes, integrate them into their financial plans, and uncover tax-saving strategies that offset rising expenses. Contact us today to start planning for a stronger 2026.