What Will Impact Employers — and What to Watch If It Applies to You
 |
For most New York employers, 2026 compliance risk won’t come from a single sweeping change. Instead, it will come from a series of smaller but meaningful adjustments affecting wages, benefits, payroll deductions, unemployment costs, and reporting obligations. Individually, these changes may seem manageable; collectively, they demand planning.
Below is a practical, employer-focused round-up of the most significant New York State payroll and HR issues for 2026, ordered from those impacting nearly all employers to those affecting more specialized segments.
Minimum Wage and Exempt Salary Threshold Increases
Effective January 1, 2026
This is the most universal change employers will face in 2026, with immediate implications for payroll costs, hiring budgets, and employee classification.
Minimum wage rates
$17.00 per hour in New York City, Long Island, and Westchester
$16.00 per hour in the remainder of New York State
There are separate minimum wage rates for home health aides and the hospitality industry, which can be found here.
Exempt salary thresholds (executive/administrative)
$1,275 per week ($66,300 annually) in NYC, Long Island, and Westchester
$1,199.10 per week ($62,353.20 annually) in the rest of the state
Meeting the salary threshold alone does not preserve exempt status. Employees must still satisfy the applicable duties test, making this a good time to review classifications proactively rather than reactively.
For additional details you can review our Minimum Wage and Salary Threshold enews.
New York Paid Family Leave: 2026 Rates and Benefits
Paid Family Leave affects nearly every New York payroll because it is funded through employee payroll deductions, regardless of whether leave is actually taken.
2026 contribution and benefit figures
Employee contribution rate: 0.432% of gross wages per pay period
Maximum annual employee contribution: $411.91
Maximum leave duration: 12 weeks
Benefit rate: 67% of the employee’s average weekly wage
Maximum weekly benefit: $1,228.53
Maximum total benefit over 12 weeks: $14,742.36
Payroll systems must be updated for the new rate and cap, and employers should ensure leave policies and employee communications reflect the updated benefit amounts.
The updated figures are included in HR One’s Paid Family Leave Guide.
Unemployment Insurance Changes Under the 2026 State Budget
Unemployment Insurance updates in 2026 combine short-term employer relief with longer-term cost considerations.
Key UI changes
Pandemic-related federal UI debt eliminated, removing interest assessment surcharges
Maximum weekly unemployment benefit increased from $504 to $869
Taxable wage base increases to $13,000 for 2026
Beginning in 2027, the wage base will index annually to statewide wage data
While some employers experienced some relief from the elimination of surcharges in 2025, higher benefits and growing taxable wage base mean UI costs remain an important planning item into 2026 and beyond.
For more details on the changes, you can view a recorded webinar on this subject HR One conducted in the autumn of 2025.
Overtime and Tip Tax Changes: What Employers Should Know
Recent federal changes related to overtime and tip taxation have generated confusion, but the practical payroll impact is limited for most employers.
Key points
These are tax deductions claimed by employees, not changes to payroll withholding
Overtime deduction applies only to the premium portion of overtime pay
Tip deduction applies only to voluntary tips, subject to income limits and caps
Payroll calculations and withholdings generally remain unchanged
For employers, this is primarily an employee communication and year-end reporting issue, not a day-to-day payroll processing change. For more information review our recent update on the subject.
NYS Secure Choice Retirement Program
The Secure Choice Savings Program applies to a narrower group of employers, but it carries real administrative responsibilities for those it affects.
At a high level
Requires employer registration and employee data submission
Uses after-tax payroll deductions into employee-owned Roth IRAs
Employers do not contribute or provide investment advice
2026 registration deadlines
Employers with 30 or more employees: March 18, 2026
Employers with 15–29 employees: May 15, 2026
Employers with 10–14 employees: July 15, 2026
A common pitfall is assuming this is handled entirely by payroll. While payroll can process deductions, employers retain responsibilities within the state’s Secure Choice system. See our HR enews for more details.
Electronic Certified Payroll Reporting
For employers involved in public works or prevailing wage projects, this is one of the most operationally significant changes in 2026. While reporting certified payroll is not a new requirement, this new methodology will impact the process employers are used to.
Certified payroll requirements
Mandatory electronic submission through the NYSDOL Certified Payroll Portal
Effective for payrolls due on or after December 31, 2025
Reporting is required at least every 30 days, even during no-work periods
Submission via direct entry or pre-formatted XML file upload
Reports generally cannot be amended once submitted
Penalties and enforcement
$100 per day penalty after a 14-day grace period for late filings
Portions of payroll data publicly searchable (with personal identifiers redacted)
Planning Ahead for 2026
What makes 2026 challenging isn’t any single change — it’s the overlap. Wage increases, benefit contribution changes, unemployment costs, new reporting systems, and expanded administrative programs all intersect across payroll, HR, finance, and operations.
Employers that treat these updates as a coordinated annual planning exercise — rather than a series of last-minute fixes — will be far better positioned to stay compliant and avoid disruption.
Have questions? Let us know!