Updates to New York State Employment Law in 2026

Three Changes That New York-Based Employers Need To Be Aware of in 2026

As we begin 2026, it is important to be aware of several key changes to New York State employment law. Employers should ensure that they are adhering to these changes to remain compliant with the ever-changing legal landscape. As reported, in a prior client alert, the Trapped at Work Act is one significant change. There are three additional changes that employers should be aware of as they begin Q1 of 2026.

Increases to Minimum Wage, Salary Thresholds, Cash Wages and Tip Credits

On January 1, 2026, the minimum wage in New York State increased to $17 per hour in New York City and Nassau, Suffolk and Westchester counties. For all other parts of the State, minimum wage increased to $16 per hour. This is the final year of predetermined minimum wage increases. To account for inflation, future increases will be determined by the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) for the Northeast Region.

On January 1, 2026, the weekly salary threshold for “executive” and “administrative” employee exemptions rose to $1,275 ($66,300/year) in New York City, Nassau, Suffolk and Westchester counties, and to $1,199.10 ($62,353.20) elsewhere in the State. Statewide, the “professional” exemption still follows the federal threshold of $35,568/year.

Cash wage and tip credit amounts also increased. Tipped service employees in New York City, Nassau, Suffolk and Westchester Counties now receive a $14.15 cash wage with a $2.85 tip credit; tipped food service workers in these regions now receive a cash wage of $11.35 and a $5.65 tip credit. For the rest of the State, the cash wage and tip credit are $13.30/$2.70 and $10.70/$5.30 for tipped service employees and tipped food service workers, respectively.

Consumer Credit Checks To Be Banned From Use in Employment Decisions

• New York has now generally prohibited the use of consumer credit reports in hiring and other employment decisions, with certain exceptions. Governor Kathy Hochul recently signed an amendment to the New York Fair Credit Reporting Act, making it unlawful to request or use the consumer credit history of an applicant or employee for employment purposes.
• The law goes into effect on April 18, 2026. Improper use of a credit report will now be considered an unlawful discriminatory practice.
• There are several narrow exemptions to the law. In certain circumstances, credit history may still be part of an employment consideration. These exceptions include:
  • An employer, or agent thereof, that is required by state or federal law or by a self-regulatory organization to use an individual’s consumer credit history for employment purposes.
  • Persons applying for positions as or employed as peace officers or police officers, or in a position with a law enforcement or investigative function in a law enforcement agency.
  • Persons in a position that is subject to background investigation by a state agency; provided, however, that the appointing agency may not use consumer credit history information for employment purposes unless the position is an appointed position with a high degree of public trust.
  • Persons in a position in which an employee is required to be bonded under state or federal law.
  • Persons in a position in which an employee is required to possess security clearance under federal law or the law of any state.
  • Persons in a non-clerical position having regular access to trade secrets, intelligence information or national security information.
  • Persons in a position: (A) having signatory authority over third-party funds or assets valued at $10,000 or more; or (B) that involves a fiduciary responsibility to the employer with the authority to enter financial agreements valued at $10,000 or more on behalf of the employer.
  • Persons in a position with regular duties that allow the employee to modify digital security systems established to prevent the unauthorized use of the employer’s or client’s networks or databases.

Disparate Impact Discrimination Is Now Codified

New York has codified the longstanding doctrine of Disparate Impact Discrimination. Amidst shifting federal enforcement priorities, New York has amended the Executive Law to prohibit employment practices that have a discriminatory effect, even if the practice was not motivated by a discriminatory intent. The amendment expands this doctrine by defining a discriminatory effect as one that actually or predictably results in a disparate impact on a group of persons because of their membership in a protected class.

The burden of making a disparate impact claim generally favors a plaintiff. A potential plaintiff only needs to demonstrate that a particular employment practice causes, or predictably will cause, a disparate impact on a protected class of individuals. To overcome a claim, an employer may assert the practice is justified because it is job related and consistent with a business necessity.

However, the new law says that the employer’s justification must be supported by evidence and may not be hypothetical or speculative. Even then, a plaintiff may still prevail by showing the employer’s business necessity could be satisfied by a less discriminatory alternative. Employers should regularly audit their employment practices to ensure that they are not unintentionally creating a disparate impact or effect.