New York Minimum Wage Update in 2026: What Employers and Employees Should Know

For employers, this year is less about reacting to a single increase and more about preparing for a new wage framework going forward. For employees, it’s another step toward wages that keep pace with the cost of living.

Here’s what to know.

What’s Changing in 2026

On January 1, 2026, New York’s minimum wage will increase by $0.50 per hour.

At that point, minimum wage rates will be:

- $17.00 per hour in New York City, Westchester, and Long Island

- $16.00 per hour in the rest of New York State

This increase completes the state’s current step-based plan and sets the stage for a different approach to wage adjustments starting the following year.

How We Got Here: The 2025 Increase

The upcoming 2026 increase builds on the $0.50 per hour increase that took effect on January 1, 2025, which raised minimum wage to $16.50 in New York City, Westchester, and Long Island, and $15.50 in the rest of the state.

That 2025 adjustment was part of the same multi-year agreement between Governor Kathy Hochul and the New York State Legislature designed to gradually raise wages while giving employers time to adapt.

What Changes After 2026: Wages Indexed to Inflation

Beginning in 2027, New York will no longer rely on fixed dollar increases passed through legislation. Instead, minimum wage will increase annually based on inflation.

Those increases will be calculated using the three-year moving average of the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) for the Northeast Region. This shift is intended to ensure minimum wage keeps pace with rising costs over time rather than falling behind during inflationary periods.

The law also includes an “off-ramp”, allowing the state to pause or modify increases if certain economic or budget conditions are met.

What This Means for Employers

For employers, 2026 is a transition year.

While the January 1 increase itself is straightforward, the broader change is that minimum wage adjustments will become an annual expectation, not an occasional legislative event. Payroll systems, budgets, and labor forecasts will need to account for ongoing wage movement tied to economic conditions.

Although there are no new reporting requirements tied to the increase, employers remain responsible for ensuring updated rates are applied correctly and on time. Errors can still lead to compliance issues or wage claims.

What Employees Should Watch For

Employees earning minimum wage should expect to see the 2026 increase reflected in their pay starting January 1. Beginning in 2027, wage increases will occur automatically based on inflation rather than fixed legislative changes.

As always, employees should review pay stubs carefully to confirm that rate changes are applied correctly and raise concerns if discrepancies appear.

The Bottom Line

In 2026, New York’s minimum wage will rise again—and this increase marks a turning point. After this year, wage adjustments will move from scheduled increases to inflation-based indexing.

For employers, that shift means planning ahead and staying proactive. For employees, it means wages designed to better reflect real-world costs over time.

Brand’s Payroll helps employers stay ahead of wage changes and ensure payroll remains accurate as requirements evolve.

Have questions about how upcoming wage changes affect your payroll or compliance strategy

‍Book a call with the Brand’s Payroll team to review your setup and plan ahead with confidence.