New York adopts higher salary thresholds for exempt employees

by Charles H. Kaplan
Sills Cummis & Gross P.C.

Employers in New York must increase the salaries of exempt executive and administrative employees by December 31 to meet the requirements of recently adopted regulations. Employers also must decide whether to increase exempt employees’ salaries each year to match annual increases required by the new regulations.

On December 28, the New York State Department of Labor (NYSDOL) adopted regulations that will increase the minimum salary thresholds for executive and administrative employees under the wage and hour provisions of New York state’s Labor Law. The Labor Law does not require a minimum salary for exempt professional employees.

On October 19, the NYSDOL published proposed amendments to New York’s minimum wage orders. On December 28, the NYSDOL adopted the proposed amendments without making any changes.

Currently, New York’s minimum salary threshold for the executive and administrative exemptions is $675 per week ($35,100 per year). The following increases (based on employer size and location) will go into effect for most employers (i.e., those covered by the Miscellaneous Industries and Occupations Wage Order):

New York City

Large employers (11 or more employees)

• $825 per week ($42,900 per year) on December 31, 2016
• $975 per week ($50,700 per year) on December 31, 2017
• $1,125 per week ($58,500 per year) on December 31, 2018

Small employers (10 or fewer employees)

• $787.50 per week ($40,950 per year) on December 31, 2016
• $900 per week ($46,800 per year) on December 31, 2017
• $1,012.50 per week ($52,650 per year) on December 31, 2018
• $1,125 per week ($58,500 per year) on December 31, 2019

Nassau, Suffolk, and Westchester Counties

• $750 per week ($39,000 per year) on December 31, 2016
• $825 per week ($42,900 per year) on December 31, 2017
• $900 per week ($46,800 per year) on December 31, 2018
• $975 per week ($50,700 per year) on December 31, 2019
• $1,050 per week ($54,600 per year) on December 31, 2020
• $1,125 per week ($58,500 per year) on December 31, 2021

Rest of the state

• $727.50 per week ($37,830 per year) on December 31, 2016
• $780 per week ($40,560 per year) on December 31, 2017
• $832 per week ($43,264 per year) on December 31, 2018
• $885 per week ($46,020 per year) on December 31, 2019
• $937.50 per week ($48,750 per year) on December 31, 2020

Certain industries in New York, including the hospitality, building services, nonprofit, and farm worker industries, have separate wage orders regarding minimum wage and salary threshold increases.

A nationwide preliminary injunction stopped the U.S. Department of Labor (DOL) from implementing its new overtime regulations, which would have significantly increased the salary threshold for the executive, administrative, and professional exemptions under the Fair Labor Standards Act (FLSA). On November 22, a federal district judge in Texas halted the increase, which was scheduled to take effect on December 1.

Even though New York employers do not have to increase salaries under the DOL’s overtime regulations, they must now raise executive and administrative employees’ compensation by December 31 to preserve the exempt status of those employees.

More information on New York’s increased salary thresholds will be available in the December issue of New York Employment Law Letter.

Charles H. Kaplan is an attorney with Sills Cummis & Gross P.C. and an editor of New York Employment Law Letter. He can be reached at ckaplan@sillscummis.com.