Relates to an increase in the minimum wage

Summary of specific provisions

This bill amends sections 650 and 656 of the Labor Law to require that in the event the Commissioner of the NYS Department of Labor orders an increase in the minimum wage for a certain industry, the Commissioner must also recommend a necessary adjustment to State reimbursement rates paid to State funded Human Services providers to enable them to manage resulting recruitment and retention issues.

Justification

The Commissioner of Labor has been directed by the Governor to determine if the minimum wage for workers in the fast food industry is inadequate and should be increased. Depending on the wage board's findings the Labor Commissioner may order a minimum wage increase for fast food workers or any other group of employees the wage board has been directed to evaluate.

The Board's authority to focus a minimum wage increase on a targeted group of low paid workers, to the exclusion of other similar workers, will undermine services currently being provided to many needy individuals. Already nonprofit Human Services providers (those under the jurisdiction of OPWDD, OMH, OCFS, OASAS and DOH) are experiencing significant challenges recruiting and retaining critical staff due to an improving economy and tightening job market.

Fast food employers and human services providers compete for the same pool of labor. A targeted minimum wage boost for fast food workers, or any other industry with relatively low paid employees, will give the those industries an insurmountable competitive advantage in attracting employees. Thus, this bill recognizes the need to raise the minimum wage for all low paid employees equitably. Should the wage board provide a substantial minimum wage increase only for a selected group of employees many direct support human services professionals will be incentivized to move to those higher paid industries. This is a rational choice for human services workers who have extraordinarily difficult jobs, work under extreme pressure and have families to feed. However, in the process these workers will leave the needy individuals they cared for behind.

Consequently, vacancies among critical care staff will soar; increasingly new hires, unfamiliar with individual needs, will take the place of seasoned workers; more positions will go unfilled

altogether; awake/overnight shifts will be shorthanded; and, the ability to ensure health and safety will deteriorate. To mitigate these impacts, state funded human services providers must be provided with State reimbursement sufficient to comparably increase the wages to their front line staff to compete with an increased minimum wage in other competing labor sectors.

In addition to funding for a minimum wage boost, the State will also need to provide funding for "wage compression." Wage compression means that an employee who has demonstrated sufficient commitment and dedication to have achieved, for example, five years tenure may suddenly find him or herself working alongside a new hire making the same salary. For many direct support workers the impact can devastate their morale, a valuable commodity critical to the quality of care.

This bill requires the State to evaluate the impact of a targeted minimum wage hike and to provide necessary funding increases to minimize the damage that could result from that impact.

Prior legislative history

New Bill.

Fiscal implications

To be determined.

Effective date

This act shall take effect immediately.