Pay for New York's Delivery Workers Could Triple Next Month. Here's What to Do When You Get a Raise

What happened

New York City Mayor Eric Adams announced this week that the city would introduce a minimum wage of almost $20 per hour for delivery workers. When it comes into effect, around 60,000 workers will receive almost triple the current average of around $7 an hour, according to a press release. However delivery apps like DoorDash and Uber have hit back at the plans, saying they aren't in the best interests of workers.

"Our delivery workers have consistently delivered for us -- now, we are delivering for them," said Mayor Adams. "This new minimum pay rate, up by almost $13.00/hour, will guarantee these workers and their families can earn a living, access greater economic stability, and help keep our city's legendary restaurant industry thriving."

So what

Whatever your job, a significant rise in pay is reason to celebrate. But before you rush out and spend your new paycheck, it's wise to wait a little and see how it plays out. For starters, you'll need to factor in taxes, insurance, and other deductions. And for New York delivery workers, it will be important to see how the app companies react to the new rules.

There's still a chance that the companies involved will challenge the decision in court. A DoorDash spokesperson told Insider the company is considering several paths, including potential legal action. DoorDash argues the move will limit worker flexibility and reduce the food delivery workforce.

Now what

One of the biggest dangers of getting a pay raise is something called lifestyle creep -- spending more because you're earning more. There are a few ways you can guard against this and use the extra money to strengthen your financial situation:

• Make a budget: If you don't have a budget, sit down and map out where your money goes and what you might do with your pay raise.
• Pay down debt: If you carry high-interest debt, you might use your extra wages toward paying it down faster. Getting out of credit card debt can help to build financial security as well as saving you money on interest payments over time.
• Boost your emergency savings: Having three to six months' worth of money in a savings account can cushion you against the unexpected. See if you can put some of your new cash into your emergency fund.

According to Food Republic, it's the first time any city in the U.S. has set a minimum wage for this group. It is the result of campaigning by union groups, who have been advocating for increased pay transparency and improved working conditions. If you're on the receiving end of the new pay, look for ways to use it to build financial security. That way you'll have a safety net if things go wrong further down the road, or the app companies challenge the law.