New York State Anticipates Implication Issues with New Multi-Tiered Minimum Wage System
In April 2016, New York approved a multi-tiered minimum wage system, which took effect December 31, 2016. The structure of the new law sets minimum wages according to the geographic location of the employer and in some cases the size of the employer’s workforce. Further, the new law requires annual increases over the course of several years, ultimately resulting in a $15.00 an hour minimum wage, across all counties.
Due to the multi-tiered nature of the new minimum wage law, the government anticipates that implementing the wage increases will be problematic for many employers. In response to the anticipated problems, Governor Cuomo has called for a “transition period,” during which the state will not seek to punish employers who do not raise the pay of minimum-wage workers simply because of ignorance of the law. Instead, during the transitionary period, only employers who show “willful” or “egregious” violations will be sanctioned. In order to educate employers across the state, Governor Cuomo has assembled a task force of two hundred state employees to fan out across the state and inform employers of their obligations under the new minimum wage law.
The new minimum wage rate schedule is as follows:
| Location | 12/31/16 | 12/31/17 | 12/31/18 | 12/31/19 | 12/31/20 | 2021* |
| NYC- 11 employees or more | $ 11.00 | $ 13.00 | $ 15.00 | |||
| NYC – 10 employees or less | $ 10.50 | $ 12.00 | $ 13.50 | $ 15.00 | ||
| Long Island/ Westchester | $ 10.00 | $ 11.00 | $ 12.00 | $ 13.00 | $ 14.00 | $ 15.00 |
| Remainder of NY | $ 9.70 | $ 10.40 | $ 11.10 | $ 11.80 | $ 12.50 | * |
* Annual increases for the remainder of the state will continue until the rate reaches the $15.00 minimum wage. However, this rate has not yet been determined. Starting in 2021, the annual increases will be determined by the Director of the Division of Budget.
Effective January 1, 2017, The IRS Released Its Standard Mileage Rates
The rates are as follows:
- 53.5 cents per mile for business miles driven
- 17 cents per mile driven for medical or moving purposes; an
- 14 cents per mile driven in service of charitable organizations.
In comparison to the 2016 rates, the business mileage rate decreased .5 cents per mile. The miles driven for medical or moving purposes decreased 2 cents per mile and miles driven in service of charitable organizations remained the same.
The standard rates are based on annual studies of the fixed and variable costs of operating a vehicle for business, medical, or moving purposes. These standard rates are optional and employers are afforded the opportunity to calculate and apply the actual costs of using their vehicle. However, a taxpayer may not utilize the business standard mileage rates if it also claimed a depreciation using any method under the Modified Accelerated Cost Recovery System or claiming a Section 179 deduction. Additionally, a taxpayer may not use the standard mileage rates for more than four vehicle used simultaneously.
What Does a Trump Presidency Mean for Small Business Owners?
President Trump has laid out some major economic policies that could affect small businesses. First, President Trump has advocated lowering the income tax on all companies to 15 percent. Corporate tax rates currently range from 15 percent to 35 percent. However, the tax law cannot be changed without Congress’ approval, which has historically had trouble agreeing on tax reform. It is presently unclear, whether these proposed changes will pass. Further, because 83% of small-business owners are incorporated such that they pay business taxes on their individual tax returns, President Trump would need to also lower individual income taxes to truly benefit small-business owners.
The President has also said that he plans to repeal the Affordable Care Act (‘ACA”) immediately. He has stated that he would prefer that the states deal with the health-care issues of their residents. It is unclear at this time how his plans will be implemented or regulated. President Trump’s supporters are hopeful that deregulation of the insurance industry will vastly lower premiums, making it more affordable for employers to offer their employees health insurance. However, reports released by the U.S. Treasury Department revealed that in 2014, 1 in 5 people who purchased health care through the ACA exchange were small-business owners and that 31 percent of non-group health insurance enrollees were self-employed. Those that oppose the repealing of the ACA argue that these statistics demonstrate that the ACA was instrumental in helping small employers acquire coverage they would not have otherwise had. Many democrats in the Senate have vowed to attempt to block a repeal of the ACA. Whether they would be successful in doing so is currently unclear. Equally unclear, is with what President Trump intends to replace the ACA.
Prepared by Justina L. Potenzo